Critical cover too or not????

Gemini71

My Life Assurance is up for review, i have critical cover too, my partner just normal, we pay around £40 pm. Broker called today and says she can get it for around £38 like for like, but i asked if it was necessary to have critical cover and what difference it would make to monthly payments.... With out she can get it down to around £17!!! pm... money is tight and very tempted to just have life with out critical.... What say you!?? :undecided

Annisele

Depends a great deal on your circumstances, and I think it's a very personal decision.

For example, I'm more bothered about CIC/PHI than I am about life cover - I have no debts and no dependants, so a lump sum after I'm dead isn't important to me. CIC/PHI might pay out whilst I'm still around to need it.

If I had children, or a mortgage my partner couldn't afford to repay on his own, or some similar thing, I might care more about the life cover.

dunstonh

money is tight and very tempted to just have life with out critical.

Although think how tight it would be if you suffered a critical illness.

What say you!?

I dont think its right for anyone here to say what you should do. If we say not to bother with it and you suffer a claimable event after cancelling it then saving a few pounds on a premium and losing tens of thousands on a payout along with the lost income from employment etc will seem like a really daft decision.

You need to decide for yourself. However, its worth noting that the CI costs more than the life assurance element as you are more likely to be paid out on the CI plan.

kingstreet

I'm surprised the gap isn't bigger TBH. £38 for death or earlier critical illness cover and £17 for life only?

What's your "broker's" status? Independent, panel or tied?

I've just run a comparison for a couple aged 30, non-smokers for £100k level term for 25 years. The usual death or earlier critical illness cover is around £41 per month. If you take out the critical illness cover, life only for the same couple and sum assured etc drops to £9 per month.

Only you can decide if having critical illness cover is worthwhile. What about reducing the amount of critical illness cover, rather than do away with it altogether. Half the benefit is better than nothing and it will cut your costs a little.

lisyloo

What say you!??

I think PHI is more important than CI.
CI only pays out on critical illnesses and not on others so it doesn't cover you for inability to work.
It also pays a lump sum which wont provide an income for long enough if youre long term sick.

Personally I'd be asking the advisor why he think CI is best rather than PHI.
Perhaps there are things baout your situation I don't know.

dunstonh

Personally I'd be asking the advisor why he think CI is best rather than PHI.

Good question.

A lot of tied agents or multi-tied reps don't have a decent PHI product. They only offer a budget PHI policy that looks more like a PPI policy. The remit of a tied agent is to offer the best product in their limited product range. Not to give best advice. Best advice is only obtained from an independent.

Many people getting mortgages do not realise that the broker they are seeing could be tied. Tied agents tend to play on the fact they are whole of market on the mortgages and imply without saying that its the same for insurance. Over half of those seeing tied agents think they are really seeing an independent according to research.

ACG

There are more ways to reduce the premium than just removing CI cover.

What about having a smaller critical illness element? maybe reducing the term by a little bit? Im presuming you have cover on a decreasing basis to fall in line with your mortgage - if thats the case you coul reduce the term by 2-3 years by which time the mortgage will only be a smaller amount anyway.

Your advisor is earning money on any policy you take out. Get them working for you. Get their advice, maybe tell them you have a budget to work to of £30 or £35 or whatever is affordable and see what they come back with.

trebor21

These policys are all sold on scare tactics! have you considere income protection in the event of such circumstances instead?

poacherp

trebor21 wrote: »

These policys are all sold on scare tactics

Possibly, but let's hope you never have to claim on a policy for critical illness - sounds like you don't have one!

kingstreet

Other than cover which is required for statutory purposes, isn't all insurance cover bought and sold on the concerns people may have about "what happens if...?"