Critical illness and life insurance for teachers. Are they worth it?

havingaball74

Hi all,
For years I have been paying out on a critical illness and life insurance policy.
I have since checked with my pension provider (Teacher Pensions) and they provide:
Death in service grant
Payout of my pension in one lump sum if life expectancy is less than a year
Ill health benefits
So, my question is: is it worth continuing to pay out on a critical illness/life insurance policy? I am thinking of either reducing it or cancelling it completely.
I am 20 years from retirement if that makes any difference.
Cheers.

dunstonh

So, my question is: is it worth continuing to pay out on a critical illness/life insurance policy? I am thinking of either reducing it or cancelling it completely.

Do you have a financial need for it? (e.g spouse/children, debts).

Employer benefits are not normally enough. For example, if spouse/family are reliant on your income until retirement and you have 20 years to go, then getting a couple of years paid out on death still leaves 18 years unpaid.

jaybeetoo

Only you can decide. Think about what could happen and what the financial consequences would be if it did. Then decide if it is worth paying the premium.

My wife kept thinking of cancelling her critical illness policy to save money and then last year she was diagnosed with cancer. No previous history in the family. She's now very glad she didn't cancel.

It's a very personal decision.

Kynthia

You have to judge what your need is and reassess periodically as things change.

I'm in a different scheme but the death in service figure is no - where near enough to pay off my mortgage and leave enough money to make things a little easier fir my partner until the children are older. So I have life insurance.

I know you can claim your pension if you have less than a year to live but it can take a few months to do that. Whereas your CI will pay out even if you aren't terminal, and that money could be used for private treatment, paying bills or a big family holiday. Plus how much do you get from your db pension if that happens? I don't think it's that much but then your nominee gets the survivors pension, but that depends on how much pension you've built by that time.

If you went sick from work, say with stress or a bad back, for more than a year. As you were expected to recover at some point you wouldn't be medically retired but your pay has stopped. The CI probably wouldn't pay out but PHI would. So some decide to get this instead of or as well as CI.

csgohan4

In ideal world where you have dependents and can afford it, get CI and income protection with life insurance.

Korkyb

I'm in a similar position to you except I'm a nurse (similar benefits through work as you).

I had also paid Critical Illness for years along with my endowment which is due to mature / pay out next year.

The endowment was only a small one (originally £17500) to top up a larger existing endowment when my wife & I moved house. (The endowment was only going to pay out around 11 or 12k due to poor performance).

The critical illness cover however was set at £63k as that was how much we owed at the time.

Anyway long story short I was diagnosed with tonsil cancer early this year and following surgery & radiotherapy the prognosis is really very good & I'm almost back to full health.

I wasnt even going to claim as I didnt think my position would meet the criteria but wifie said worth a go.

Just found out today I have £63k ish coming my way.

My advice...... keep paying it. You never know

jintyb

If you are not missing what you pay in premiums, dont cancel, find other things to economise on. I was very grateful to have CI cover. Although mine didnt cover my mortgage, it gave me a "cushion" when I was DX with breast cancer.
False economy IMO. I am still 15 years from retirement.

csgohan4

Perhaps look at income protection as well if you can afford it