Retirement and critical illness cover?

Diddidi

Hi everyone - I wasn't sure whether to post here or in the planning for retirement board, so apologies if this is in the wrong place!

I'm looking to retire early in August of 2020 and evaluating my finances in preparation for the big day. I have critical illness cover which I have been paying for about 25 years now and really wondering if I need it. I have paid off my mortgage, have no debts, kids have left home and could access my pension lump sum if required (am 56 years old).

I am thinking of taking the £110 I currently pay each month for CI and putting that away to self-insure for future private medical care if I or DH ever need it.

I just wondered at what stage people stop paying for CI? Is there a reason to keep going?

Thanks in advance for any insight anyone can give

lisyloo

What do you have it for?

Income protection?
Lump sum for treatment, bucket list, house adaptations?

I can’t see why you’d need it, but the way I’d do it is to list the reasons I had it and see if they are all now covered off.
If you are covered for all the risks then you don’t need it.

Weighty1

I think trying to self-fund medical care is a pointless task. At £110/month you'd save for 10-years and probably just about have enough to pay for a hip replacement, for example. Cancer treatment can run into the tens if not hundreds of thousands of pounds and major surgery can also run into the tens of thousands. That said, the NHS will cover these things, just not as speedily as the private sector and not necessarily with the best available treatment.

The only real benefit of keeping the CIC would be if you needed to adapt your home to accommodate you if diagnosed with a critical illness which affected your mobility. Other than that, if you've got a guaranteed income from your pension arrangements and no debt there's not a massive need for it.

Diddidi

lisyloo wrote: »

What do you have it for?

Income protection?
Lump sum for treatment, bucket list, house adaptations?

I can’t see why you’d need it, but the way I’d do it is to list the reasons I had it and see if they are all now covered off.
If you are covered for all the risks then you don’t need it.

I originally took it out because I had a mortgage and 2 dependent children so it would have helped pay off mortgage. Good idea to compare original reasons, and yes, they are now covered off. Thank you!

Diddidi

Weighty1 wrote: »

I think trying to self-fund medical care is a pointless task. At £110/month you'd save for 10-years and probably just about have enough to pay for a hip replacement, for example. Cancer treatment can run into the tens if not hundreds of thousands of pounds and major surgery can also run into the tens of thousands. That said, the NHS will cover these things, just not as speedily as the private sector and not necessarily with the best available treatment.

Fair point

Weighty1 wrote: »

The only real benefit of keeping the CIC would be if you needed to adapt your home to accommodate you if diagnosed with a critical illness which affected your mobility.

I agree, and this is the main reason I kept it going. It just seems a lot of money to pay out once retired when money will be tighter. And I was thinking that a pension lump sum could be used for that if needed?

Weighty1

Diddidi wrote: »

I agree, and this is the main reason I kept it going. It just seems a lot of money to pay out once retired when money will be tighter. And I was thinking that a pension lump sum could be used for that if needed?

So how will the pension lump sum compare to the critical illness lump sum?

Could you request the insurer reduces the critical illness cover to reduce the premium? (many insurers will allow this)

Did you have plans for the pension lump sum that you'd have to forgo to have it as an emergency fund?

I do agree that unless you have a lovely big pension then it's a sizable cost each month.

Diddidi

:question::question::question:

Weighty1 wrote: »

So how will the pension lump sum compare to the critical illness lump sum?

About twice the amount of the CI lump sum

Weighty1 wrote: »

Could you request the insurer reduces the critical illness cover to reduce the premium? (many insurers will allow this)

I’ve been doing this over the past 8 years or so as I couldn’t afford the ever-increasing premiums, so I kept the premium the same and have gone for a reduction in the benefit year on year.

Weighty1 wrote: »

Do you have plans for the pension lump sum that you'd have to forgo to have it as an emergency fund?.

Well, it would be my pension income so I would need to reduce my outgoings (particularly the travel plans) but if I had a critical illness then am going to guess that this would probably be the case anyway :question: