Life insurance after a TIA

saphine

I have a life insurance policy with critical illness cover. I had a TIA  (small stroke) in February this year and discovered it's an excluded condition. Do I have to inform insurance company..if I don't and I have a full stroke am I still covered? Is it worth just cancelling the critical illnes cover aspect?My mortgage is paid  off so only need enough insurance to cover funeral expenses. My employer pays out a goodly sum if I die inservice..is it worth keeping insurance at all?

TELLIT01

You generally need to inform insurers of any change to health conditions.  How restrictive is the list of conditions which are not excluded?  If the list is very limited the cover may not be worth bothering with.

Aretnap

TELLIT01 said:

You generally need to inform insurers of any change to health conditions.  

I think you missed out the words "do not" from that sentence.

With nearly all life and/or critical illness policies there is no requirement to inform the insurer of any changes to your health status, unless it is in order to make a claim. The insurer accepts you based on a snapshot of your health at the time you apply and sets the premium based on its assessment of the risk that you will die (or get a critical illness) in the next 25 years (or however long). That includes the risk that your health will deteriorate gradually over those 25 years, as well as the risk that you'll be suddenly struck down by a major stroke or a bolt of lightning. So as long as you answered the questions about your health accurately at the time you took out the policy, any subsequent changes have no effect on your cover, so there's no need to tell the insurer about them.

It couldn't actually work any other way. If your insurance company could cancel your cover (or raise the premium to unaffordable levels, which amounts to the same thing) the moment it looked like you were about to pop your clogs, what would be the point of having the policy? In effect it would only cover very sudden deaths - and the large majority of premature deaths are not especially sudden.

As far as whether it's worth keeping the policy going that's a question you should think about anyway - but don't think that the TIA means that you have to cancel it. If you think you are now at higher risk of a serious stroke that's actually an argument for keeping it - it's more likely that you will claim on it in future.

Other things to consider:
(1) Do you have any dependants? If not, you probably don't need the life insurance aspect at all. If so you may have paid off the mortgage, but the mortgage is only one of many bills that need paying - could they manage financially without your income?
(2) Don't rely on death in service benefit as an alternative to life insurance. What if you're made redundant? What if you get a long term illness which stops you working, several years before it kills you? At that point your death in service cover would end - and having had a TIA you might find getting a new policy difficult or expensive, so don't cancel this one unless you're confident that you'll never need it again.
(3) Irrespective of whether you need the life insurance, the CI cover is probably the expensive part of the policy, and it is useful to you personally; if you have a stroke or similar, the money could be very helpful if you couldn't work, or if you needed to make changes to your home to overcome disabilities. Do you have an alternative way of protecting yourself against that risk (eg large savings?).

Weighty1

saphine said:

I have a life insurance policy with critical illness cover. I had a TIA  (small stroke) in February this year and discovered it's an excluded condition. Do I have to inform insurance company..if I don't and I have a full stroke am I still covered? Is it worth just cancelling the critical illnes cover aspect?My mortgage is paid  off so only need enough insurance to cover funeral expenses. My employer pays out a goodly sum if I die inservice..is it worth keeping insurance at all?

You DO NOT need to inform the insurance company, contrary to what was posted above.
If you DO cancel the critical illness (CIC) part of the cover then be aware that you will likely never be able to get critical illness cover again.  I've just been investigating the potential for a client suffering a TIA to get CIC and it's highly unlikely you'll get it OR long-term income protection cover.  For that reason, I'd say it's probably worthwhile keeping the existing cover in place.  Whilst it may not be ideally structured for your current circumstances but if it's the only way of obtaining CIC then having something is better than nothing.  Obviously, not advice as I don't know your full circumstances but there's very few situations in which having critical illness cover wouldn't be beneficial.

csgohan4

TELLIT01 said:

You generally need to inform insurers of any change to health conditions.  How restrictive is the list of conditions which are not excluded?  If the list is very limited the cover may not be worth bothering with.

Wrong info, That only applies to travel and private medical insurance