life insurance

slacky1230

hey guys

im looking for some advice regarding my life insurance. ive already got life insurance and critical illness which is £18 a month but ive recently moved house so need to up the figures to cover the mortage etc.

To have life insurance for around 300k is roughly £20 per month but if i was to add critical illness it takes it up another £30-40 which is more than i really budgeted for. Have i got any cheaper options or is it just a case of having to pay it?

Thanks in advance

Aretnap

All else being equal, life insurance you take out now will be more expensive than life insurance you took out several years ago, because you are several years older. So the first question is: are you assuming you have to cancel your existing policy and take out a new policy for the full amount you're looking for? If so then stop assuming - you may well find it's cheaper to keep your existing policy and get a second policy which just covers the extra that you need. It's perfectly fine, indeed it's quite common, to have more than one life insurance policy.

Second question is do you need critical illness cover? And do you need it for the same amount as the life insurance policy? Critical illness cover is good to have, but it's not the best way of protecting yourself from long term serious illness. It might, for example, pay out a big pile of cash if you had a heart attack, had a stent fitted and go back to work in a couple of months (which is very nice) - but not a bean if you're off work for years with arthritis, back pain or depression (which is less nice). Most people would regard a long term income protection policy (permanent health insurance) as a higher priority than CI cover; perhaps with a bit of CI cover which would pay for things like adapting your house if you were confined to a wheelchair, but wouldn't need to cover your living expenses for the rest of your life (as the income protection would do that).

PHI isn't particularly cheap either, but it's arguably a better fit for most people's needs than a £300K of critical illness cover.

slacky1230

i didnt think of it that way to be honest. my current policy pays out 165k and 36k critical illness. Would you say its a better option to keep this in place and get an additional policy of 100k to cover the higher mortgage? 

kingstreet

What does your CI actually cover? I'd expect top-drawer Defaqto 5 star cover to be a lot more expensive for £300k. It's not Beagle Street, or Lloyds Banks's "sawn-off" Scottish Widows direct plan is it?
https://www.defaqto.com/star-ratings/life-and-protection/critical-illness-level-term/
Be careful with these ratings as providers often have different plans with different levels of cover so ensure yours is the right one you are comparing.

slacky1230

Here's what's listed under policy summary critical illness covered

Alzheimer’s disease before age 65 Resulting in permanent symptoms
Aorta graft surgery For disease or trauma
Benign brain tumour Resulting in permanent symptoms
Blindness Permanent and irreversible
Cancer Excluding less advanced cases
Coma Resulting in permanent symptoms
Coronary artery by-pass grafts With surgery
Deafness Permanent and irreversible
Heart attack: Heart valve replacement or repair With surgery
HIV infection Caught in the UK from a blood transfusion,  a physical assault or at work in an eligible occupation*
Kidney failure Requiring dialysis
Loss of hands or feet Permanent physical severance
Loss of speech Permanent and irreversible
Major organ transplant:  Motor neurone disease Resulting in permanent symptoms
Multiple sclerosis With current symptoms
Paralysis of limbs Total and irreversible
Parkinson’s disease Resulting in permanent symptoms
Stroke: Third degree burns Covering either 20% of the surface area  of the face or body
Traumatic head injury Resulting in permanent symptoms
 * The eligible occupations for HIV caught  at work are: • The emergency services – police, fire, ambulance • The medical profession – including administrators, cleaners, dentists,  doctors, nurses and porters • The armed forces
Extra Critical Illnesses The following extra critical illnesses will also  be included if your policy includes a Critical Illness benefit.The Insurer will also pay the lower of £20,000 or 20% of the Critical Illness Sum Assured. These headings are only a guide to what is covered. The full definitions of the illnesses covered and the circumstances in which you can claim are given in the Policy Terms and Conditions.
Low Grade Prostate Cancer  Carcinoma of the breast Requiring surgery
Crohn’s Disease Severe 
Angioplasty Double vessel
Ulcerative Colitis Requiring surgery

Weighty1

To be honest, that list of critical illnesses is meaningless without knowing the claims definition for each condition.  ALL critical illness plans will cover heart attacks but in the past many required the heart attack to be of a certain severity based on troponins in the blood stream whereas now some cover ANY heart attack provided a consultant says it is a heart attack and not some other cardiac condition.

fullofcold

Weighty1 said:

To be honest, that list of critical illnesses is meaningless without knowing the claims definition for each condition.  ALL critical illness plans will cover heart attacks but in the past many required the heart attack to be of a certain severity based on troponins in the blood stream whereas now some cover ANY heart attack provided a consultant says it is a heart attack and not some other cardiac condition.

Agree with this, also would like to say that I know of many providers that offer a lot more cover than that.  Critical Illness cover is definitely a product people should be picky on.

Grabs39

We’re taking out life to cover the whole mortgage balance, but Critical Illness cover for half the mortgage balance.  It saves quite a lot, but conversely we would still have to pay half the mortgage if seriously ill (but we could use the payout to make payments during a difficult time, rather than clear the balance).

As others have said it’s difficult to compare prices, as different policies seem to cover different things.

slacky1230

which companies do you suggest with the best level of critical cover?

coachman12

I have found little difference between any of the big, well-known insurance companies. 
However some specialise and some are more comprehensive than others. As slacky mentions a need to find the cheapest good options, I would refer him to Martin Lewis' Critical Illness comparison article at  https://www.cheaplifeplans.co.uk/company/514-critical-illness-life-insurance?utm_source=AdWords&utm_campaign=Insurance.Life.Partner.514&utm_term=%2Bmartin%20%2Bcritical%20%2Billness%20%2Bcover&utm_content=g_333165017892__b&utm_medium=PPC&network=Search&device=c&deviceModel=&aceid=&loc_physical=9044899&loc_interest=&type=&gclid=EAIaIQobChMI4a-VrKnt6AIVmK3tCh05vwR1EAAYASAAEgK2ivD_BwE
Good luck and all the best in finding what is right for you, slacky.

dunstonh

There is quite a large difference between providers.   Some providers focus on the budget side. Some focus on the quality side.    A bunch are in between.   There are also budget plans at higher prices and good quality plans that dont cost too much.    So, you cannot use price as a measure.