Critical Illness

Money_Saving_Mandy_2

Hi all,

Does anyone else agree with Martin on critical illness....

Did a mortgage lender flog you life insurance? Save £1,000s in minutes New Article (from this weeks email)

"I'm not a big fan of critical illness policies. Many believe they will "pay out if you get a serious illness and can't work". Yet that isn't true, critical illness policies pay out a lump sum if you get a specific critical illness as defined by the terms of the policy, which can often be changed; for example losing one leg isn't critical, but two legs is! So don't think "I'm covered for cancer", most policies only cover a limited range of cancers.

Picking a good critical illness policy would take a doctor and financial nerd combined; so I suggest you're better off getting the level term cover and an income protection policy - which does just that - protect your income from a range of eventualities."

I am thinking of cancelling my policy and getting the income protection instead, any thoughs??? Anyone know of the cheapest income protection providers?

thanks

Doh

I do agree with Martin, i'm currently being treated to Cancer (non hodgkins lymphoma) i'm expect a critical illness payout, sadly its only about 30% of my mortgage and still is being "processed" i.e. they are trying there hardest to get out of paying, i've been having treatment for over 2 months and have been of work for almost 3, i get 3 months paid leave then its satutory... in retrospect i'd have been much better off with income protection. As at the mo i've dragging myself (against my GP's advice) into work when i can as i'm affraid i will get to the point were i have no income and potentially no critical illness payout!

Andrew24620

There's only two reasons a provider will not pay out on a Critical Illness policy
1) If the condition is not covered by the policy terms and conditions
2) If there has been "reckless/negligent" non-disclosure of an existing condition.

The big issue is how well the policy was explained to and understood by someone who took it out.

If you took out a car insurance policy and tried to claim for spilling red wine on your living room carpet then the insurance co. will refuse to pay out. However, if the terms and conditions were not clear, or it wasn't explained well by the advisor/provider or the buyer misundertood what they were getting then it's easy to see why they'd be up in arms at the rufusal to pay out.

Providers must provide clear and easily understandable products - saying what is and what is not covered. Advisors should take time to ensure clients understand what they're buying. And Jo Public also need to be confident they undertand it too.

It's difficult not to sympathise with Doh in these cicumstances but the hard fact is was the condition Doh is sadly suffering from covered by the CIC policy? If it wasn't - then reason 1) above applies. If Doh believed he WAS covered then it's reasonable to show why to the provider/advisor as there may be a case for them to answer and good luck to Doh in pursuing this.

The advice re level term plus Inc. Protection may be valid - but each person's circumstances is different - so weigh up all aspects before cancelling a CIC plan.

sam1970

this evening and after weeks of thinking and hesitation i pulled the plunge and cancelled the direct debt for my critical illness policy...i am not prepared to continue paying £73/month for those b***ds just to let them make my life more miserable when i make a claim. i just wish that i took this decision earlier.

FRUGAL_4

sam1970 wrote: »

this evening and after weeks of thinking and hesitation i pulled the plunge and cancelled the direct debt for my critical illness policy...i am not prepared to continue paying £73/month for those b***ds just to let them make my life more miserable when i make a claim. i just wish that i took this decision earlier.

I couldn't agree more, I am seriously thinking of cancelling my policy also, my brother in law is a GP and he states more and more illness's are just not covered in CI Policies, and he hears of people who do have Critical Illness's and they have a real struggle to get a payout, my brother in law doesn't have a CIP, he said he wouldn't waste £80 on such a policy and he earns £100,000 pa, he has far more to lose than I do, I'm going to type up a letter and get it posted..I getting a wee bit fed up of having far to much insurance for this and that, and I am not living a life paying for it.decision made! What did people do 10/15 years ago and none of this stuff was about? I have £100,000 in equity, I would sell the house and rent if I couldn't afford the mortgage repayments due to ill health.

sam1970

you are absloutely right frugal...if i was you i wont even bother writing to them..just cancel the direct debit..they will start phoning and sending letters crying for your money....ignore them.
for the money saved i will spend half of it on a gym membership to keep fit and save the other half to pay towards a nice holiday...this is definitly a better use of the money.

dunstonh

Critical illness policies pay out in most cases. Over 80% is the payout rate for most providers. Non-disclosure tends to average around 5%-10% of refusals but unclaimable event is a common reason as well.

this evening and after weeks of thinking and hesitation i pulled the plunge and cancelled the direct debt for my critical illness policy...i am not prepared to continue paying £73/month for those b***ds just to let them make my life more miserable when i make a claim. i just wish that i took this decision earlier.

Well lets hope you dont suffer a critical illness then.

for the money saved i will spend half of it on a gym membership to keep fit and save the other half to pay towards a nice holiday...this is definitly a better use of the money.

And when you get that critical illness you will have to cancel all that, sell the house and move into rented accomadation and end up "crying" that you should never have cancelled it.

I would sell the house and rent if I couldn't afford the mortgage repayments due to ill health.

And how would you pay for the rent?

Ok, I am being harsh here but the logic you lot have shown for not having it is daft. Just ask anyone that has had a payout from CI as to how beneficial it is or ask those that have suffered a claimable event but not had CI and see what their struggles are like.

What did people do 10/15 years ago and none of this stuff was about?

It was about then.

plonkee

I'm not taking out critical illness insurance.

But do I have income protection insurance that will cover mortgage repayments if I suffered a critical illness.

There is a genuine risk that I may suffer a critical illness in my lifetime, where I could have had my mortgage paid off. I am prepared to accept that risk and so won't end up crying. If you aren't prepared to take on that risk, then you should reconsider. Don't forget that if you make the wrong decision, there is no one that you can claim against but yourself.

olly300

Being a bit square I discovered the financial ombudsman news. They have a few issues on non-disclosure on insurance polices. This is the latest one:

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/61/61-insurance.htm

sam1970

dunstonh..you dont work for insurance company by any chance!!!

sam1970

dunstonh wrote: »

Critical illness policies pay out in most cases. Over 80% is the payout rate for most providers. Non-disclosure tends to average around 5%-10% of refusals but unclaimable event is a common reason as well.



Well lets hope you dont suffer a critical illness then.



And when you get that critical illness you will have to cancel all that, sell the house and move into rented accomadation and end up "crying" that you should never have cancelled it.



And how would you pay for the rent?

Ok, I am being harsh here but the logic you lot have shown for not having it is daft. Just ask anyone that has had a payout from CI as to how beneficial it is or ask those that have suffered a claimable event but not had CI and see what their struggles are like.



It was about then.

what about asking people who forked thousands of pounds on CI insurance and then got their claims thrown out for selly reasons...i still cant forget that guy on bbc watchdog who had to go back to work while on chemotherapy for testicular cancer because the insureres refused his claim...guess why?...he did not declare a kidney infection he had as a child (what a bunch of****)....i would not even remember if i had an infection 5 years ago let alone 30 or 40 years ago.