Life Insurance - Friends Life ???

TeddyGirl

Hi.

My fianc! and I are completing on our first house tomorrow (exciting!!!) and we are trying to arrange life and critical illness cover. We spoke to our mortgage advisor who suggested Friends Life, initially we went along with it because we are pretty naïve and haven't done anything like this before but the price was over £50 for both of us ! Still we went through with the application, that was months ago. Months ago I went to the doctor about a lump in my breast which was found to be a fibroadenoma (benign) and as the friends life application was so through I had to disclose this. Now months down the line they are still trying to get additional information from my GP about this lump. In addition to mailing me a form to confirm I didn't want it removed while I sent off 6 times and each time they said they hadn't received it ! Which in itself is concerning !

We aren't in a contract with them yet so we are looking around and my mortgage advisor is still pushing Friends Life (because she gets commission).

I was wondering if anyone could suggest a good company to get Life and Critical Illness cover from. We are both young (24) and in good health, neither of us smoke or drink heavily and we don't have any children. Basically we just want insurance that will pay the mortgage if either of us die or some money to help pay the mortgage if either of us get a critical illness.

Can anyone suggest a company please ?

Thanks in advance !!!

dunstonh

I was wondering if anyone could suggest a good company to get Life and Critical Illness cover from.

Friends Life is a good option.

We are both young (24) and in good health,

That is not true though. Whilst your general health may be fine, you have a medical event that means you are not clean health and it will require disclosure and underwriting assessment which will include contact with your GP. you are going to get the same hold ups wherever you go.

TeddyGirl

I still think over £50 a month seems like an awful lot of money and I am not pleased that they have lost letters I have sent them with personal information on. It has made me lose a lot of faith in them. I also can't help but feel that the mortgage advisor is only pushing them on us because she gets commission and that makes me trust them less. We are looking at about £25 a month for both of us.

InsideInsurance

TeddyGirl wrote: »

Now months down the line they are still trying to get additional information from my GP about this lump. In addition to mailing me a form to confirm I didn't want it removed while I sent off 6 times and each time they said they hadn't received it ! Which in itself is concerning !

Unfortunately neither GPs nor Protection Insurers seem the most coordinated organisations in the world. My insurance took about 9 months to get set up with the GP claiming not to have received the report request but having cashed the cheque that allegedly was sent with the request. The the GP putting something in the report that resulted in a decline (the GP wanted another £60 to show me the report).

Then my consultant stepped in and sent a report, for free, which took a couple of attempts for the insurer, Aviva, to confirm receipt etc.

Did eventually get it all sorted though

TeddyGirl wrote: »

Basically we just want insurance that will pay the mortgage if either of us die or some money to help pay the mortgage if either of us get a critical illness.

To put the cat amongst the pigeons, is CI the best option? What happens if you get a serious illness such you cannot work but it is not one on the list covered by CI?

Personally I'd put PHI above CI given its a replacement income to help with all your living expenses and not just mortgage and provides that income irrespective of what the illness is (obviously subject to self harm exclusions/ preexisting etc)

TeddyGirl

Thanks for you response. What is PHI please ? Sorry I am new to all this.

Basically we have worked out how much it would cost to pay the mortgage over 2 years (our term of mortgage) if one of us was unable to work as the other could afford the bills (works out about £20k)

InsideInsurance

TeddyGirl wrote: »

Thanks for you response. What is PHI please ? Sorry I am new to all this.

Basically we have worked out how much it would cost to pay the mortgage over 2 years (our term of mortgage) if one of us was unable to work as the other could afford the bills (works out about £20k)

If your mortgage is only 2 years and after that you can afford to only live on one salary then PHI, and I would have thought CI, is a hammer to crack a nut. Most people are looking at 25 years to pay off their mortgage hence PHI which pays out to your specified date (normally 65th birthday) is appropriate.

PHI is Permanent Health Insurance and is the "full fat" version of Income Protection (ASU - accident sickness and unemployment - is the budget version)

TeddyGirl

Our mortgage term is 35 years but we have a 2 year fixed rate thing (sorry not sure how it all works) and after that we can remortgage so if something was to happen we could sell the house. We have £6k savings (which we will build up) so if something was to happen and we needed extra (such as if house didn't sell) then we have a cushion.

We are thinking of £25-£30 per month for both of us. We just want something that would pay mortgage if either of us die and would pay enough out to pay mortgage (about £750 per month) should one of us get ill.

Sorry if I'm not explaining myself very well, this is all new to me.

InsideInsurance

TeddyGirl wrote: »

Our mortgage term is 35 years but we have a 2 year fixed rate thing (sorry not sure how it all works) and after that we can remortgage so if something was to happen we could sell the house. We have £6k savings (which we will build up) so if something was to happen and we needed extra (such as if house didn't sell) then we have a cushion.

We are thinking of £25-£30 per month for both of us. We just want something that would pay mortgage if either of us die and would pay enough out to pay mortgage (about £750 per month) should one of us get ill.

Sorry if I'm not explaining myself very well, this is all new to me.

This is where seeing an IFA or advisory protection broker would be sensible.

So going back to playing devils advocate, you sell the house as you are too sick to work but it isnt covered by the CI insurance. What then? Rent? Do you have enough money to do that for the rest of your life? Would there be enough equity in the property to cover it for 50 years or would you be happy enough in a small flat that you could afford for that length on a combination of partners income, benefits and equity.

TeddyGirl

Right I have been looking and am now thinking of getting it through LV. Life insurance which works out £10.31 per month and personal sick pay which works out about £8 per month each.

Does this sound like it's the type of cover we need ?

This is all so confusing !

dunstonh

We have £6k savings (which we will build up) so if something was to happen and we needed extra (such as if house didn't sell) then we have a cushion.

That is not much of a cushion. It would soon be eroded. Indeed, the costs of selling the house could eat all of that.

We are thinking of £25-£30 per month for both of us. We just want something that would pay mortgage if either of us die and would pay enough out to pay mortgage (about £750 per month) should one of us get ill.

I am sure we would all like it to cost that little. I think something is going to have to give in what you want or what you want to pay. Not too far off maybe but £25 is unlikely to be there for decent coverage

Right I have been looking and am now thinking of getting it through LV. Life insurance which works out £10.31 per month and personal sick pay which works out about £8 per month each.

Does this sound like it's the type of cover we need ?

Sounds too cheap. Perhaps the LV sick pay is actually PPI rather than PHI or a really budget version of PHI.

InsideInsurance

TeddyGirl wrote: »

personal sick pay which works out about £8 per month each.

Havent looked at the product but based on the price it sounds like an Accident and Sickness policy, the AS of ASU.

The reason these are budget income protection is that they will only pay out for 12 months, or a few do 24 months, and then stop even if you are still too sick to work. PHI on the other hand pays out until your specified date, normally your 65th birthday, and so could be paying out 20+ years or more depending on your age. I believe the average PHI claim is just over 7 years!

The other key difference is ASU is underwritten at point of claim and so no option of pre-existing conditions being covered and always a risk that they decline a claim saying its linked to a prior condition. PHI is underwritten at point of sale and so you know up front before buying what is and isnt covered.

Needless to say a policy that could payout for over 20 years is going to be much more expensive than one that will only ever pay out for a maximum of 1 year - though not 20x as much.