Critical Illness & Decreasing Life Cover

ktt206

Just a quick question for anybody in the know how. I have both critical illness cover and a decreasing life cover, both to the value of my mortgage.

If i got a critical illness and and died from it, god forbid it happens on both counts, would both policies pay out? Would i receive the money from the critcial illness, assuming its identified in the terms and conditions, and would my next of kin receive payment if i died from it or it was terminal?

Sorry to be so doom and gloom before Christmas, but just changed my policy and it got me thinking.

P.S. dont you just hate the ideal of insurance for a list of critical illnesses, really considered scrapping the cover and saving the money.

starrystarry

Assuming they're separate policies, yes they would both pay out. If it's one "life or earlier critical illness" policy, then it would pay out on the first event only, ie the critical illness.

kingstreet

Hang on a minute. One or two things to take into account.

Is it a single Death or Earlier Critical illness plan or a critical illness cover plan with a separate death benefit policy?

If it's D or ECI, you'll only get one lot of benefit, either the critical illness payout or the death benefit.

If you have two separate policies you MAY get two payouts. You need to check if the CI policy has a minimum surviveability period. If it does, you may not get the CI payout if death takes place within a few days of the claimable event.

kingstreet

As an example, here's the relevant section from Bright Grey's key facts;-

We will pay your Critical Illness Cover
when the first of the following happens
during the term of the cover:
• you are diagnosed with, and the
diagnosis meets our definition of,
one of the critical illnesses shown
on our list
• you are diagnosed as, and the
diagnosis meets our definition
of, being totally and permanently
disabled
and you survive for 14 days after
your diagnosis.

snoop12

Advice needed. I took out decreasing mortgage insurance 7 years ago. It cost £85.00 a month My wife was 49 and a smoker and I was 52. Our mortgage was £80,000 and the policy was to last 18 years. I have a dispute with the bank because 1) we were convinced we had to have the protection and 2) its very expensive. Before I do take action does anybody think this is expensive or am I being unreasonable.

ACG

If you bought it through your bank then it will be more expensive than if you went to an Independent Mortgage or Financial Advisor.
However you cant really complain about the price you paid, they gave you the price you had a choice to accept it or say you cant afford it.

Your only argument is the fact that you thought you HAD to buy it, but its a case of proving this. You will have had a letter advising you of your right to cancel etc or should have done at least and that will have been sent from the life insurance company.

If you still want the cover you might be best just replacing it then cancelling the existing policy.

dunstonh

snoop12 wrote: »

Advice needed. I took out decreasing mortgage insurance 7 years ago. It cost £85.00 a month My wife was 49 and a smoker and I was 52. Our mortgage was £80,000 and the policy was to last 18 years. I have a dispute with the bank because 1) we were convinced we had to have the protection and 2) its very expensive. Before I do take action does anybody think this is expensive or am I being unreasonable.

1 - Unless you can prove it then its a no-go on any complaint. Its a he said/she said scenario. Plus, the bank will have a factfind, needs analysis, suitability report, cancellation rights etc to show you needed it. You have nothing.

2 - Banks are expensive. They are typically up there with the most expensive distribution channels. However, that is not grounds for complaint.

If you are still in good health now then rebroke the cover to something better/cheaper (if you can)

dzug1

Given that you are 7 years older now it's probably going to be more expensive to change even if originally overpriced.

But worth checking

kingstreet

Using dunston's point in number 1 - make a subject access request under the Data Protection Act and get copies of those documents. There will probably be a charge.

Check over the factfind and suitability letter. Post back here and let us know what they say. It may not help much, but at this moment you have no grounds for complaint as has been mentioned.

kingstreet

Out of curiosity I've just done a quote for;-

M53NB N/S & F50NB S £80K Dec Term 18y

and the premium came back at around the £35 per month mark.

Is it possible your plan includes critical illness or another benefit you aren't aware of, or have forgotten about? The difference appears too great to be attributable to the different distribution channel costs alone.

dunstonh

and the premium came back at around the £35 per month mark.

You would expect an IFA/WOM mortgage broker to be around 40% cheaper than a bank. So, I concur. I have seen bigger differences before (I recall a £126 premium that I was able to get like for like £76 with the same provider but closer to £65 with someone else).

Only thing i will add as a possible caveat to that is that prices on life assurance were higher 7 years ago than they are today.

Anyone considering changing MUST know what they have before they change it otherwise any comparison on price or features is flawed.