Critical illness cover advice

stedwell

Hi
My OH and I have had critical illness cover since being in our 20's. We are both around the 50 year mark now and it is becoming very expensive as the premiums rise each year. I have always kept the policies as I feel they are important cover. However there are many expenses we are now facing and also I am rather sceptical of whether they would actually pay out as I know there are many loopholes to exploit!! On the other hand I am also aware that we are at a time when we face a greater chance of being ill.
I was wondering if anyone is in a similar situation or any thoughts on what would be the best plan or if there would be a better way to use the money. We do still have a mortgage and 2dds.
Thanks

Annisele

I think you should take yourself and your policy documents off to see an IFA.

Critical illness policies aren't all the same - they don't all cover exactly the same conditions. If your policies are old, you might find that an IFA can find you better cover for less money. OTOH they might say that your policies are better than what is currently available and you should keep them. If your health has changed since you took out the policies, you may not be able to replace them at all.

You also might want to look at your protection needs more generally. I don't have much critical illness cover, and I've no life cover at all - but I do have PHI (income protection). Financially, my partner and I would both be fine if the other died - the thing that would really stuff us would be one of us having to give up work to look after the other. So, our protection is geared towards illness rather than death.

With children, you'll likely not make the same choices I have. However, one good thing IFAs can do is show you how much belt and braces protection would be (£££), then talk to you about which of the things you can have are most important to you.

_Andy_

stedwell wrote: »

also I am rather sceptical of whether they would actually pay out as I know there are many loopholes to exploit!!

What loopholes would these be and where did you hear them?

dunstonh

We are both around the 50 year mark now and it is becoming very expensive as the premiums rise each year.

You would be better off with a guaranteed premium version.

However there are many expenses we are now facing and also I am rather sceptical of whether they would actually pay out as I know there are many loopholes to exploit!!

Your budget has no impact on the insurers decision on whether to pay out or not. The claims success rate on these plans is in excess of 90% with most closer to 95%. So, what loopholes are you referring to that do not seem to appear on the claims stats?

I was wondering if anyone is in a similar situation or any thoughts on what would be the best plan or if there would be a better way to use the money.

I know someone that has just claimed on a CI policy. He is unable to work so would have no income as self employed. Yet his mortgage is now paid off and has a surplus lump. Luckily he also had a PHI policy and that is now paying out as well. He says it is the best money he has ever spent in having those. Insurance is only seen as valuable when you have a claim.

stedwell

Thanks for your replies. I suppose I was referring to the general feeling I have when I read the terms that the criteria can be very specific. Also when a close relative claimed on her policy a few years ago I know she had a few problems. I will book to see an IFA. Amazingly I do have one but never hear anything or have any reviews. I think I will start looking for a new one.
Thanks

dunstonh

I suppose I was referring to the general feeling I have when I read the terms that the criteria can be very specific.

They are specific. It covers a range of specified critical illnesses. By specifying the things clearly there are fewer ambiguous issues.

I will book to see an IFA. Amazingly I do have one but never hear anything or have any reviews.

Do you employ your adviser on servicing basis or transactional? Sounds like transactional.