Critical illness cover confusion!

Min1958

I have just been diagnosed with ovarian cancer, thankfully at an early stage, but will be starting chemotherapy and will be off work for some time and my sick pay ends at the end of March, after which I will be on SSP. I have a Flexible Mortgage Plan ISA Option (£24.80 per month) with Legal and General which will pay out £9750 critical illness cover now. However, I also have critical illness cover as part of my mortgage life insurance (£24.31 per month) with Norwich Union which ends in 2022 with my mortgage. It has a decreasing term payments which means I would get £18,837 now. Here's my confusion:
1. Do I claim both and then have no fallback if I recover and get ill again?
2.Do I claim one or other and which?
My mortgage ends in 2022, and I am single with no dependants. My family can sell the house to cover the mortgage if anything happens me before that. I was planning to retire in 2024. I'd be grateful for thoughts on this, there's so much in my head at the moment and none of it good!

HappyHarry

Min1958 wrote: »

I have just been diagnosed with ovarian cancer, thankfully at an early stage, but will be starting chemotherapy and will be off work for some time and my sick pay ends at the end of March, after which I will be on SSP. I have a Flexible Mortgage Plan ISA Option (£24.80 per month) with Legal and General which will pay out £9750 critical illness cover now. However, I also have critical illness cover as part of my mortgage life insurance (£24.31 per month) with Norwich Union which ends in 2022 with my mortgage. It has a decreasing term payments which means I would get £18,837 now. Here's my confusion:
1. Do I claim both and then have no fallback if I recover and get ill again?
2.Do I claim one or other and which?
My mortgage ends in 2022, and I am single with no dependants. My family can sell the house to cover the mortgage if anything happens me before that. I was planning to retire in 2024. I'd be grateful for thoughts on this, there's so much in my head at the moment and none of it good!

I'm sorry to hear your news.

You should claim on both policies straight away if you can. As one policy is a decreasing term policy, it will pay out less as time goes on, so by claiming now, you maximise your benefit. I can't think of any benefit for delaying claiming.

You can use the proceeds of the policies as you wish to, you do not need to pay off the mortgage with the proceeds.

However, you should think about when you recover, will you be straight back to full-time work, or will you go back in a reduced capacity? If so, you may need some of these funds to cover any income shortfall?

If you were to stop paying the mortgage (and there is no suggestion that you would!), then your mortgage company could look to re-possess regardless of the state of your health.

I hope that you recover soon, and that the benefit from the policies exceeds the expenditure needed in you future.

Min1958

Thank you, Harry, I appreciate you taking the time to reply with some helpful advice.

fleetingmind

Sorry to hear your news.

100% claim them both now. I'd look to pay off your mortgage if it's possible. When I was paid out on mine some mortgage providers will waiver their early repayment fees so worth baring that in mind as they won't ask the reason for settling your mortgage..

Good luck to you.