Legal and General Mortgage Decreasing Critical Illness Cover

gordib259

Hello All,

a few years ago my wife and i took out policies for the above with L&G. Cover is Mortgage Decreasing Critical Illness Cover, £200k decreasing over 24 years.

The policy costs £45 (me) and £55 (wifey) per month.

I am looking to cancel this policy and take out something which has lower monthly premiums.

My Qs before i phone L&G are:

Can i cancel?

What's the diff between taking a policy over 24 years, or one over 5years (and renewing after 5)?

Will i be entitled to anything back from the policy if i cancel?

I would like us to have cover, just not something that's combined £100 per month.

All help greatly appreciated.

Thanks.

JooS

If you cancel a policy and replace it with another you need to look at the differences in the illnesses covered as they have changed over the years. You may find that a new policy does not offer as good a list of illnesses hence why it might be cheaper.

You can usually cancel pure protection policies but there is not normally any 'surrender value'.

There is not usually a charge from the life insurance company to cancel policies.

If you take a policy over a shorter period of time and become ill during that time (something which may not be covered by the policy) then when you come to renew the plan you may not be able to get cover or the premiums may become very expensive.

Hope this helps.

dunstonh

Can i cancel?

Yes. Although be wary if you bought it through an L&G sales rep. They usually put a 4 year clawback fee on it.

What's the diff between taking a policy over 24 years, or one over 5years (and renewing after 5)?

Higher premiums each time you renew and the risk of not being able to get insured in future or higher premiums due to health issues that may occur (assuming you mean 5 year term assurance and not renewable assurance). Terms on the new plans may not be as good. e..g older CI plans tend to have better coverage and less restrictions than modern ones. Also, not all CI plans are the same.

Will i be entitled to anything back from the policy if i cancel?

No. L&G havent done investment backed plans for a very very long time. If yours is pure term assurance then it contains no investment element.

I would like us to have cover, just not something that's combined £100 per mont

Even at your age, the premiums sound higher than I would expect. Are their medical conditions that could have put the premiums up or are you smokers? or did you buy from a tied sales rep or bank rather than an IFA (tied sales reps/banks are more expensive)?