Critical Illness cover !

montycat_2

I don't have a mortgage ,I don't work (I am widowed with 3 young kids) and I manage to live on Widowed Parent's allowance ,Child Tax Credit and Investment from my Late Husbands Insurances .
We go on holiday and I am rarely short of money .Also.if I do become ill ,the other allowances remain consistent .
It has been suggested that I take out Critical Illness cover but ,apart from needing to pay for childcare ,I can't think of any other reason why I need it .

My monthly spend is minimal ,my kids are cosy and I trying to work out whether this is an absolutely necessary Insurance .(I have life insurance).

Would you take out Critical Insurance to pay for Child care alone ?

Honest insight into what else I need to consider would be most welcome .

Gingham_Ribbon

Who recommended it? Personally, I would rather put some money away every month for that eventuality. You're more likely to benefit from the money.

If you do go ahead with a policy, make sure you check the small print throroughly before going ahead with it to ensure it covers your needs.

Iona_Penny

I second Gingham Ribbon; firstly you sound like you are doing a great job of managing your finances. Policies like this will be based on your age, health, and history, and you could end up paying large premiums for what may be unsuitable for you.
There are some very knowledgeable peeps on this board, who may tell you what you need to consider from a 'financial bod' eye view!

montycat_2

It is my Financial advisor who mentioned it .Because of my extreme circumstances ie Husband being killed young ,I do have money in savings but ,he is concerned that this money should be used for me and my kids to "live" life .

I think the idea is to have this in place so that I don't have to drain my savings .IYSWIM

I just want to be sure that this is something I absolutely need and not a "fork out each month" thing.

Edinburghlass_2

Have you had any quotes on what you would be paying for CI?

Especially being on your own with young children you do have to consider what would happen if you were undergoing treatment over a long period of time and in and out of hospital.

Generally all insurance is in place for the "what if" situation but CI is an important consideration nowadays and I would find out more from your FA.

montycat_2

Hi ,He is going to phone me with some prices .

Gingham_Ribbon

I suppose I would consider what kind of help I would need and what would be available to me without the cover eg financially from the state, from savings, practically from friends and family. Then I'd consider the benefits from the policies the FA tells you about. Then, if I decided to go ahead with a policy, I'd shop around for a good one at a reasonable price and check and double check the small print.

rossbenn

If most people paid out for all the insurance/assurance they needed they would be living on beans and toast.
I think you should look at your priorities and make sure you are getting all the benefits you are entitled to.
You can do this by checking on a site called entitledto.co.uk
Baring in mind that it is possible to be out of action through illness's or accidents which do not come under the criticil illness banner. I would think you should take a look at Income Protection which pays a monthly benefit rather than a lump sum.
The monthly payment if you had a claim would be linked to the cost of living or thereabouts every year whereas if you had a claim for C.I. say five years ago you may have been encouraged to invest the lump sum in a with profit bond. Now some of these bonds are only paying 1% or 0% at present so you would be in a bit of a pickle as regards using it as a source for income. The up side to the bond would have been that you could pass the capital on to your children if you died through a trust but not the income from a I.P. policy. But as always it is down to your own personal circustances. I think in your situation advice from an IFA would be worth much gold.

Good Luck

rossbenn

Gingham_Ribbon wrote:

I suppose I would consider what kind of help I would need and what would be available to me without the cover eg financially from the state, from savings, practically from friends and family. Then I'd consider the benefits from the policies the FA tells you about. Then, if I decided to go ahead with a policy, I'd shop around for a good one at a reasonable price and check and double check the small print.

Sounds good, however I am a little bit confused.
If montycat had the knowledge to do as you suggest why would she go to an IFA in the first place?
One must ask do you consider yourself able to tell the difference between the small print in such complicated products?. If you do then, I can only assume that you are an IFA.

montycat_2

I have an IFA through having to deal with the money left to me from my DH's estate but ,he has moved onto pastures new so ,I have had this one recommended to me .
Would I qualify for an Income protection plan even though I don't work ?
My Income is my Widowed Parent's Allowance CTC and late Hubbys pension .

jasonking

All valid points raised here. the two insurances you might want to condiser are IP and CI cover...but it does depend on your personal circumstances. The more access to cash savings you have and the bigger the network of friends and family that you could rely on for practical help if you were ill (taking kids to school, cooking, transport etc) then the less you will value these kind of insurances. Remember that most family units (and contributers to this board?) have two parents to fall back on, as you dont then you should consider what you would do if you were seriously ill. You can get IP even though you dont work, most companies will give a fixed benefit of up to £1k pm.

A good IFA should be helping you to think about this.