Life cover with critical illness or income protection

Latsie

I am in the process of taking out life cover over a level term. My dilemma is whether I opt to combine this with critical illness or income protection. I work in an industry which is stable and I am qualified - so am I correct in saying that critical illness cover would be better for me rather than income protection? Although CIC tends to be more expensive doesnt it??

lisyloo

What does the income protection that you mention cover?
I would assume it was sickness, but you then go on to mention stability and qualifications, so it's a bit confusing.

If we are talking about sickness, then personally I would go for income protection.
The main reasons are.
1) Income protection covers you if you cannot work whereas critical illnesses is for certain illnesses e.g. cancer, and doesn't necesarily relate to your ability to work or not.
2) Income protection covers your income (as it says on the tin), critical illness gives you a lump sum. This is great for house alterations, treatment, care, last wishes etc. but would not help provide a lifetimes income for someone young.

But as you mention stability and qualifications - is there an element of redundancy cover?
What's your current redundancy package?
What's your current sick pay package at work? Does your employer give you free income protection?
I would always say first find out what benefits you have at work.
If your redundancy package is good already then you might not need insurance.
I've been with my employer 12 years and my package would cover me for nearly 8 months (at full pay - I'm sure I could stretch it for longer), so I don't feel the neeed for insurance with my qualifications.

opinions4u

They do different things. So in a perfect world you'd have both CI and PHI.

I would personally prioritise PHI over and above CI.

But a CI rider on the life policy can be a cheap way of arranging cover.

dunstonh

My dilemma is whether I opt to combine this with critical illness or income protection.

Depends on the quality of the CI and PHI you are choosing vs the cost. Life & CI can make sense given the overlap. However, adding in PHI (or PPI) may not do.

so am I correct in saying that critical illness cover would be better for me rather than income protection?

A stable industry and your qualifications have no impact on your health. So, income protection (PHI) would be better than CI. Are you perhaps mixing up PPI as being income protection?

Personally, I believe PHI should be above CI in the pecking order. PPI should be at the bottom (although when used in conjunction with a PHI with matching deferment periods, it can work well).

ACG

As opinions for you has said PHI/IP (Income Protection) i would in general place above Critical Illness cover.

As lisyloo has said i think you need to expand on your definition of Income Protection. If you are looking at something that has an element of Unemployment cover then its unlikely to be "Income Protection" as in general that is known as ASU and will only pay out for 12-24 months.

But Income Protection will cover your income until your selected retirement age and will pay out for pretty much any medical condition that tops you working.
Critical Illness will pay out a lump sum if you get one of the 35 or so mentioned illnesses.