MSE not a fan of critical illness cover - should I or shouldn't I ?

countrycat

Hi, am considering an Aviva Critical illness policy, i periodically look into it, think it's too expensive and forget about it for a few years !
However now in late 40's with two dependants and husband in a secure but stressful job.  Have a mortgage of 60k covered with life insurance already.  Income quite low so can't afford really good cover and wondering whether its value for money - a pay out of 20,000 seems to be costing me £8k on one illustration.
I considered income protection but husband gets 6 months full and six months half pay and again it's bloomin' expensive. 
You have all been so helpful in the past with a mortgage dilemma, hoping for some enlightenment from your experience
Thanks All

[Deleted User]

countrycat said:

a pay out of 20,000 seems to be costing me £8k on one illustration.

How did you come to that conclusion?

Critical illness is a monthly payment.  You may pay £50 and then get a payout of £20k.  Or pay £20k over many years and get a payout of nothing.

Critical illness isn't cheap but it's damn useful if you ever need it.  Dying is cheap, but living sick can be very expensive.

countrycat

zx81  how come MSE aren't keen on it ?

countrycat

And what would you advise for someone on low income ?

[Deleted User]

countrycat said:

zx81  how come MSE aren't keen on it ?

No idea.  MSE aren't keen on a lot of things, but then, it's not particularly knowledgeable about financial products. It's more of a 'best current account and Nectar points' site.

I'd recommend you speak to an IFA, to go through your needs as a whole.  It's about the whole package, rathe rthan bits and pieces and you need the right cover for your needs.

dunstonh

countrycat said:

zx81  how come MSE aren't keen on it ?

it is strange as of all the different types of insurance I have seen over the years, there are more claims on CIC than any other type.

strawb_shortcake

We paid around £1500 into our critical illness insurance around 15 months in before it paid out just over £100k. We had high premiums due to family illnesses, he was a smoker and we were both a bit overweight. 
It was my Husband that was ill, he was a stay at home Dad so we were possibly over insured. We could have paid the mortgage off but decided against it as we felt we were better with savings. It does give us the ability to pay for work to be done in the house and garden that my Husband now struggles to do. 

countrycat

Thanks, i think the issue for me is i can't afford a monthly payment that would pay back such a decent amount.  I have been quoted £40 - 50 per month for 20 - 25k pay out which would only cover us for a year at best so i'm wondering whether its worth it for those kind of figures. 

MalMonroe

Deleted_User said:

countrycat said:

a pay out of 20,000 seems to be costing me £8k on one illustration.

How did you come to that conclusion?

Critical illness is a monthly payment.  You may pay £50 and then get a payout of £20k.  Or pay £20k over many years and get a payout of nothing.

Critical illness isn't cheap but it's damn useful if you ever need it.  Dying is cheap, but living sick can be very expensive.

I don't agree that dying is that cheap. After putting it off because it makes me depressed, I've been looking into policies that will pay out for my (very simple) funeral. I already have one small policy that I started twenty years ago but I will have to pay into that until I go and of course, the amount paid out now will not increase, I've reached the plateau. I've been offered the opportunity to cash it in and would like to but obviously will only receive about a third of what will be eventually paid out if I do. I'd want to start a new one but the final payout will be only half the sum of the one I've got now, because of course I'm older than I was when I started. I feel that I can't stop now so I'll have to keep paying premiums but the payment won't go higher but if I stop, it'll be worse. I know I won't be here but it feels mean to go without leaving something behind. Maybe I'll win the lottery soon. 

[Deleted User]

MalMonroe said:

Deleted_User said:

countrycat said:

a pay out of 20,000 seems to be costing me £8k on one illustration.

How did you come to that conclusion?

Critical illness is a monthly payment.  You may pay £50 and then get a payout of £20k.  Or pay £20k over many years and get a payout of nothing.

Critical illness isn't cheap but it's damn useful if you ever need it.  Dying is cheap, but living sick can be very expensive.

I don't agree that dying is that cheap.

That's ok. I wouldn't expect you to.

But it doesn't change the fact that it's peanuts when you compare it to the potential costs of living with a critical illness, coupled with a reduced or zero income.

The fact you chose a terrible way to fund your own funeral is a separate matter.

countrycat

Seems like vitality are a bit cheaper so i'll have a look at theirs, thanks for comments so far