Critical illness +income protection

Cpn81

Hi, hoping for some help.

I bought my first home a year ago through a broker. They sold me buildings and contents, decreasing term assurance with critical illness and income protection all through legal and general. I've now changed the buildings and contents as it was very expensive.


The other policies seem expensive as well. My question is do I actually need critical illness cover?


I get sick pay from work and have the income protection so feel that is quite a lot of cover and maybe critical illness is excessive.


Thanks

hcb42

only you can determine if you want to pay for it. Personally I don't and that's the risk I take

dunstonh

My question is do I actually need critical illness cover?

Statistically, you are more likely to claim on CIC than you are life assurance. I deal with more CIC claims than I do life assurance.

No-one can tell you if you are going to need it as it is a crystal ball job. If we tell you that you dont need it and then in 12 months time you suffer a claimable event but no longer have it, then you are not going to thank this site.

You almost certainly have an financial need for it.

Chances are, if all the policies are L&G, that you saw a tied agent of L&G. A lot of estate agent brokers are not whole of market but tied to L&G. Their prices are higher than whole of market/independents. This is one of the reasons you should never use tied agents. Not just on price but also on quality of product. L&G's CI cover is priced as a relatively budget option (at least via IFAs and whole of market advisers) but has the lowest number of conditions covered of all the mainstream providers. So, they reduce their cost by covering less.

Cpn81

Thanks.

I pay 27 a month for income protection and 32 a month for decreasing term assurance + critical illness. I think this is quite expensive.

I'm leaning toward cancelling the critical illness

dunstonh

There is no context to say whether it is expensive or not. However, as you used a tied L&G rep, we know their pricing is above the whole of market version of the L&G products. Plus, if I wanted CIC, then I would want a better product than the L&G one unless I was on an absolute budget. £32 for life and CIC is not a high premium for an actual amount being paid on protection.

insurancebod

Agree with dunstonh; this is your call. If it's likely you'd spend more then you'd earn if you were unfortunate to be critically ill, then CIC would be worth considering.

I recommend you look at your income protection policy. If you get sick pay which covers your income, then your income protection policy might not pay you anything.

Cpn81

Thanks for the replies

my works sick pay is 6 months full pay and 6 months half pay. I'll have a think about it. This may make more sense to cancel.

rs65

Check there are no commission claw back clauses with the broker

ACG

What happens after the 12 months? Usually you end up on ESA which is around £100 a week IF your meet the criteria.
The average income protection claim is around 6-7 years.

There is a post on the Mortgage forum, a couple bought a house 3 years ago. Mr is unable to work due to ill health and so now it is lookig like they will need to sell up.

I am not saying you should keep it or you should cancel it, all I would say is for £60 a month you know come rain or shine you can afford to keep the roof over your head.

Cpn81

After 12 months I think my wife would have gone from part time to full time and we'd have to use some savings.

I work in an office, I think if I was off for over 12 months it's more than likely it'd be one of the critical illness that caused it.

ACG

Not necessarily, the 2 biggest claims for income protection are Back pain and stress, neither of which you can claim for on critical illness.

If I had to choose one or the other, I would go with income protection every time. You are more likely to claim on it. But it should not be one or the other, although sometimes budgets dictate that to be the case.