Paying sickness insurance

Gromit78

Years ago I took out a policy for sickness insurance, to enable me to receive money to cover 50% of my monthly bills (including mortgage) should I become sick and have to rely on state payments. In any one time this can be used for up to 12 months at a time. I have used it and took payments for about 6 consecutive months.

I have always kept paying it (it's now just under £30 a month) and would pay out £600 a month, as if I cancelled it, then health conditions I have been diagnosed with since the policy was first taken out, would not be covered by a new policy. These are health conditions, whilst not ongoing, may recur at some point.

I am now mortgage free, and don't have any credit. I am also in full time employment in a staff role which pays up to 60 days sick leave per year if required. I do still have bills to pay though.

My hesitancy about cancelling the policy, and being £30 better off each month comes from having been made redundant twice in the 3 years - and have not been sure whether I would obtain another staff role with all the financial safeguards that comes with. (like my current role).

Any advice please folks?

Weighty1

Firstly, I'd check that this plan can run as a standalone policy and doesn't need you to have a mortgage. The vast majority of these plans DO require you to have a mortgage and the payment is often limited to the mortgage payments + up to 25% associated mortgage costs (such as B&C insurance or an investment vehicle for an interest only mortgage).

In regards to the unemployment side of things, how difficult would it be for you to get a job were you received £600/month, because in effect that's all you'd need to find to be in the same financial position that the redundancy cover is giving you?

ThinkingOutLoud_2

Weighty1 is right - first off check if the policy is still relevant with no mortgage.

Then, you have balancing act as with much of this type of insurance - how much are you paying vs how likely vs what would you need if you became unemployed.

If, as is suggested, this was to protect your mortgage payment and you no longer have any - your original motivation for cover does not exist at the same scale.

If your new "protection" at work is good already despite limited time employed, you could save the £30 a month and build up an emergency access fund that does not require claim to be accepted.

With latent medical conditions, you could also discuss what is probable / likely with your doctor, so as to judge the risk of future time off work / recurrence.

Of course, neither you, he/she or we have the required crystal ball but I hope that helps?