Critical illness cover & Income protection with new mortgage?

Chris344_2

I am interested to know if it's worth taking such policies out now I am heavily financially committed.

The critical illness policy that has been recommended to me by a financial advisor is a decreasing plan with decreases in value in line with my new mortgage which includes one off payments for things like kidney failure, loss of limbs, blindness etc without affecting the final payout if a critical illness should arrise.

Income protection will pay me 80% of my currently monthly income index linked for up to 5 years if I am unable to work due to health reasons.

Is it wise to take these types of polices out or are they not worth the paper they are printed on?

I 'heard' a friend of a friend received 70k for having pre-cancerous cells that have since been removed with no further treatment.

Currently have not dependants

dunstonh

I am interested to know if it's worth taking such policies out now I am heavily financially committed.

If you have a claimable event wouldnt you be even more financially committed and would likely lose the house?

Is it wise to take these types of polices out or are they not worth the paper they are printed on?

If you have a claim then they are worth every penny you paid. If you dont have a claim then you may see them as a waste of money. Are you likely to have a claim in the next 25 odd years?

I 'heard' a friend of a friend received 70k for having pre-cancerous cells that have since been removed with no further treatment.

My youngest claiment was aged 25. Had a 31 year old a couple of years back too. Most tend to be in their 40s and 50s. Problem is that buying it then when you are likely to need to most is damned expensive. Better to get it younger when its cheaper even if you may not need it until later (but you never know)

ACG

80% of your income seems a very high percentage...is that 80% of your pre tax income or after tax?

Also, i dont know of any companies that index link for just 5 years. Its either throughout the term or not at all?

But to give you a rough idea, critical illness pays out on approximately 90% of claims if not more...have a look on google for critical illness claim statistics, you will see the companies who publish them. Im a big fan of income protection and think that pretty much everyone who works should be atleast looking at it.
You havnt said its too expensive which makes it sound like its within budget but your just querying the actual policies?

They are valuable products and presuming you meet the criteria, they will save you a LOT of stress at a time when you are probably quite vulnerable.

opinions4u

Is it wise to take these types of polices out or are they not worth the paper they are printed on?

I've had a mix of life assurance, PHI and critical illness cover since 1992.

They have provided a fallback position through marriage, far too many children popping out, struggling financially and also feeling quite comfortable financially.

I've never claimed a penny on them, so I'm thousands of pounds out of pocket. But if something unexpected had happened when the finances were very tight, the family would have been well protected. As the kids hit university age, it will mean that they can finish their education if my wife's excessive smoking costs us an income. Or my excessive eating leaves me 6 feet under. Or if some drunk driver smashes in to me, crippling me and leaving me unable to work again.

I am interested to know if it's worth taking such policies out now I am heavily financially committed.

Can you afford not to have such policies? I'd suggest that if you aren't able to afford them you are not just heavily committed, you are over-committed.

weighty1_2

Chris344 wrote: »

I am interested to know if it's worth taking such policies out now I am heavily financially committed.

The critical illness policy that has been recommended to me by a financial advisor is a decreasing plan with decreases in value in line with my new mortgage which includes one off payments for things like kidney failure, loss of limbs, blindness etc without affecting the final payout if a critical illness should arrise.

Income protection will pay me 80% of my currently monthly income index linked for up to 5 years if I am unable to work due to health reasons.

Is the adviser tied or completely independent? I ask because L&G is one of the few companies who has an income protection plan that can be selected with a maximum payout term of 5years. However, often there will be providers with a very similar premium that would pay out for the full term of the plan rather than a limited period.

Think about it for a minute. If you've been off work for 5years do you think you are ever likely to return? Quite possibly not.

Is it wise to take these types of polices out or are they not worth the paper they are printed on?

Personally, I think it is very wise. Millions of pounds are paid out every year (~£160m in critical illness claims alone by L&G last year!)

I 'heard' a friend of a friend received 70k for having pre-cancerous cells that have since been removed with no further treatment.

Currently have not dependants

I doubt this is the case. The term PRE-cancerous is kind of a giveaway. To claim for cancer on a critical illness policy the cancer has NOT to be pre-malignant, non-invasive, cancer in-situ, borderline malignancy or have a low malignant potential. It's call CRITICAL ILLNESS for a reason but sometimes people think they are covered for an awful lot more than they are. This is the beauty of having the income protection running alongside it.