Critical Illness payment

brizzleboy

Hi there,

I have been unsure whether to post this, and then where to post it, so here goes. Around 7 years ago I was diagnosed with cancer, I had critical illness cover on my mortgage and as it turned out the insurance provider agreed to pay out. (This was very soon after they contacted my oncologist.)

At the time I had an offset mortgage, and I had built up some savings to keep the interest down. When the insurance company paid out they paid out the difference between my actual mortgage amount I owed, less the amount I had in the offset savings account. I queried this with them but they said that the savings account was linked and so they only had to pay me out the difference. As I didn't know if I was going to be around much longer I shrugged and just moved on.

Well I survived the cancer (obviously) and this nagging doubt in my mind says I gave up my savings, did I really have to? As it was 7 years ago I even wonder if too much time has passed to question / try to claim it back.

I've not been able to find anything about this subject on the www, so if anyone is kind enough to read this and has any facts or experience thank you in advance.

dunstonh

When the insurance company paid out they paid out the difference between my actual mortgage amount I owed, less the amount I had in the offset savings account.

That isnt how CIC normally works. It is either set up on a decreasing term basis (where the sum assured decreases each month broadly in line with a repayment mortgage) or level term where the sum assured remains the same for the whole term. Any savings offset or overpayments should have absolutely no impact. Only exception would be if you bought a budget/low quality option from the lender that had that specific clause. Rare but possible.

What did it say in the policy document?

strawberries1

Congrats on beating cancer OP!

Weighty1

I agree with Dunstonh. Normally, irrespective of savings, whether you make underpayments, overpayments, win the lottery and pay the mortgage off, it should have no impact on the cover. A decreasing term plan "assumes" an interest rate of normally between 7-12% and decreases based on this and this alone.