FTB Insurance, Critical Illness & Income Protection

LJE091

Hello,

My boyfriend and I finally got the keys to our first home on Friday. I'm now starting (I realise I should have done this sooner...works been very busy!) the task of looking for life insurance/critical illness cover & income protection.

I've seen a very similar post on here recently and have got some great info from it. However, I'm still totally confused what the best option is for us and have some additional questions to the ones I've seen already asked.

Should I get CIC & life insurance from the same provider or separate? I'm not sure if this is a silly question?? If not, what are the pros and cons to each?

Should we apply for our cover separately (as in a policy for me and one for my bf)? My understanding of CIC is that you get one shot so to speak. For example if I became seriously ill and unable to work they would pay out, but then say years down the line my boyfriend also became seriously ill or died there would be no more payout?

Whilst we currently have no children I'd like to take out life insurance that will provide us with cover for when we do have children to avoid any hassle later in life, when we potentially may have had health issues, making it difficult for us to get cover without it costing a fortune. Again, not sure if this is a silly question - perhaps insurance doesn't work like that and all insurers provide this anyway?

Sorry this is super wordy, please let me know if you need anymore info and thanks in advance for any help

csgohan4

check out the article on this:


http://www.moneysavingexpert.com/life-insurance/


The brokers also do critical illness and income protection as well

Mark_Jefferson

Critical Illness Cover will pay out if you're diagnosed with a critical illness (think cancer, heart attack, stroke). It pays one cash lump sum, which is typically used to pay off the mortgage in full. Income Protection pays out a regular monthly income, with long-term policies covering your income right up until retirement age. This would typically be enough to pay your mortgage each month, plus extra for bills etc.

Income Protection policies are based very much on you as an individual, so there's no such thing as joint IP for couples. You and your boyfriend would have to have separate policies and each would pay out independently of the other insuring your own respective incomes.

You're right in that with joint Critical Illness, and Joint Life and Critical Illness plans, you only get one shot. So if you became seriously ill, the CIC policy would pay out but if you then recovered and became ill again later, or your boyfriend became ill, the policy would have ended. You can get separate Critical Illness policies, one for each of you, which would ensure two payouts, however.

You're very, very right in that it pays to get cover while you're young and healthy. The older you are and the more health conditions you have, the higher the cost of cover. With IP, you'll simply get exclusions. For instance, if you threw your back out today and tried to get some IP tomorrow, you'd likely get a whole spine exclusion on the policy that meant you'd never be able to claim for a bad back even if it kept you off work. Better to take it out sooner rather than later!

CIC and IP are two very different products, so it might not make sense to go to the same provider. CIC in particular is quite dynamic in terms of the number of illnesses covered and how severely you have to suffer from them before the policy will pay out. The provider that will offer you the best IP might not offer you the best CIC and vice versa. It's worth going to an independent broker who can check the whole market for you. Many don't charge you a fee for this service.

YHM

Some good points above.

Best one is....get advice! Sit down with a local broker. They will tailor recommendations to your needs

Mark_Jefferson

Best one is....get advice! Sit down with a local broker. They will tailor recommendations to your needs

Also a good point!

kingstreet

Income protection/Permanent Health Insurance is one of those areas where picking the wrong terms to save money really can come back to bite very hard.

Always choose 'own occupation' cover and if the provider you are considering won't offer it, get independent advice. Don't buy 'suited occupation' or 'work tasks' cover. It makes a claim very, very difficult.

In fact, just get independent advice full stop. It will be worth it to find the most cost-effective cover.