Do I really need life and critical illness cover?

Dave2018

Hi

I'm looking for people to either tell me I'm right and that I'm on the right track to avoiding being ripped off, or that I'm being completely naive and should live in the real world.

I'm nearing completion on my first property and of course have been looking into life insurance and critical insurance cover. I'm thinking of not bothering with this because:

• I'm single and have no dependents. (I can think again about insurance if I meet the right lady.)
• If I die, the bank will just sell the flat
• Because of the fact I've been off work with stress and had counselling in the past, I'm not insured against permanent disability anyway
• If I'm critically ill, I can move in with my family and sell the flat, though that may be a big stress I can really do without
• I work for an organisation that's generous with sick pay and the amount of time you can have off sick (someone never did a full week in the entire year she worked for us and never went down to half-pay, it's very difficult to get sacked due to sickness)
• Yesterday knee pain came on suddenly and now out of the blue I'm wearing a knee support and need Physiotherapy, so instantly I'm either lying to my insurance company, or risking my premiums going up or them refusing to insure me against something else.

Thoughts and opinions appreciated. Of course, I intend to have home and contents insurance, but opinions on whether I need life and critical insurance cover would be appreciated very much.

Thank you.

Zero_Sum

Ive never bothered for similar reasons, and if I do die, my pension pays out anyway

Also given that I was youngish, the likelyhood of becoming critically ill is less, and as i was overpaying (mortgage would be cleared in under 10 years) The cost v risk for me just wasnt worth it.

SonOf

If you have no-one that is worse off in the event of your death you do not need life assurance.

However, if you purchase critical illness cover, then including life assurance is common sense as the premium difference is usually only pennies. Although permanent health insurance should be prioritised before CIC.

Yellow_mango

Agreed that if you have no dependents, you don’t need life insurance.

Critical illness might be worth considering. As might income protection of some kind. To make your life easier if you couldn’t work for some reason. My employer has a generous sick policy, with 6m full pay. So I have an IP policy which kicks in after that. Hopefully very unlikely to be needed, but will definitely ease the stress if it were.

It’s also well worth looking at what your employer offers in terms of benefits. Mine has very well priced life insurance and critical illness available through salary sacrifice, and as a group policy there is no need for any difficult questions or medicals.

Yellow_mango

Although the other thing to consider is the price advantage of signing up whilst you’re young and relatively healthy. Especially if you did come to acquire dependents in the future.

When we first got a mortgage back in 2002, aged 25 or something, we got life insurance, for which we pay £14 a month for what is now somewhere just over £100k cover. Not nearly enough to cover our current mortgage, but equivalent cover now is coming out nearer £200pm so I can’t quite bring myself to cancel the old policy. I figure for that price it’s better than a kick in the teeth.

lisyloo

I wouldn’t bother in your situation (but do keep it under review if circs change).

Weighty1

life insurance, based on your circumstances, I wouldn't bother with (although when added onto critical illness the additional cost is often negligible).

To play devils advocate:

Who says you'll be able to see your flat if you were to fall ill? Around me there's brand new houses being sold at a discount that aren't selling and flats aren't always the easiest thing to sell.

Yo'll just move in with family if you're critically ill.........and burden them with having to look after you, potentially needing to give up work to do so? If that not a tad unfair of you?

The work scheme may be generous but is it indefinite? You mention someone not working a full week for a year but that's wholly different than being off continuously for 1year +. I recently looked at some stats on long term income protection claims with LV, Aviva and Royal London. An AVERAGE claim with those companies lasted something like 4-years 4-months, 7-years 4-months and 9-years 11-months. AVERAGE! Is your company going to pay you for that length of time?

Personally, I'd be more inclined to look at long-term income protection. Yes, it would exclude mental health disorders due to the pre-existing nature of this and would likely exclude your knee due to the recent flare up of an issue but it would cover anything else. (It may be possible that some insurers would still cover you for mental health conditions but is very much dependent on individual circumstances)

Dave2018

Thanks, all. Interesting points.

Zero_Sum

One of the other reasons i forgot to add was that i have a decent amount of equity. So worst case, I can always sell up & buy an ex council house 10 miles down the road without a mortgage. This was a point that the mortgage advisor in Halifax couldnt (or perhaps wouldnt) get her head around when spending most of the process trying to flog me insurance (even though at start they stated they wouldnt do this)

missile

Financial Advisors will always tell you about wonderful products you cannot do without. Remember PPI?

You need to weigh up the risk and reward.

Weighty1

missile wrote: »

Financial Advisors will always tell you about wonderful products you cannot do without. Remember PPI?

You need to weigh up the risk and reward.

I think you'll find that few financial advisors actually sold PPI. Most of it was sold by banks, hence how the adverts are positioned.