Life with CIC & Income Protection

IAMIAM

I have been reviewing my insurance recently as they have sent me a reminder to review it as I took them out just before I was 30...
£150k Life with CIC : L & G : £370 : Fixed To Age 70
£3k Monthly Income Protection : L & G : 26 week deferral : £320 : Fixed To Age 65
I am reluctant to change any, as I have just had a quick check on quotes and to buy the Life with CIC at 150k would now cost me £700!, I was tempted to increase it to 250k, however that increases my annual premium to £912. Is this just a tactic for them to get me to do this? 
Having had a bereavement when I was younger, I was quick to get things in place at a cheap rate long term, but feel like I just want to forget about them now.
Any thoughts?
What I do find odd is that Permanent Health Insurance is roughly costing me £11,000 for my whole lifetime, meaning I only need to claim on it for a minimum of 3-4 months and the policy has paid for itself...

dunstonh

Is this just a tactic for them to get me to do this? 

No.    People often forget what their direct debits are for and forget about inflation.

Any thoughts?

L&G for life, CIC and PHI.     It wasn't an L&G rep you saw originally was it?    Some of the older L&G products were not very strong a in terms of coverage.  Not an issue with Life assurance but was with the other two.

What I do find odd is that Permanent Health Insurance is roughly costing me £11,000 for my whole lifetime, meaning I only need to claim on it for a minimum of 3-4 months and the policy has paid for itself...

Do you have the budget version or a long deferment period?  Are you in a clerical or non-manual role?

IAMIAM

They were done with Cavendish an Moneyworld. The PHI is the 26 deferment and then pay out until return to work, not a budget version. I was office based role, now in education, but they say this no longer matters as the policy is in place.

dunstonh

Until relatively recently, L&G was priced for the budget end of the market and their product was offering a budget level coverage.    Not all plans are equal.  L&G were priced to pick up price focused people rather than quality focused people.   They have in more recent times offered a better quality product, albeit more expensive.   That doesnt matter in some areas.  I have my own life assurance with L&G for example. Life assurance is pretty straightforward.   But for PHI and CIC, quality varies with providers, often quite significantly.

Changes in occupation do not matter to plans in force but would on new plans.   26 weeks deferment lowers the price.

Premiums, on new business,  start to rise incrementally once you get into your 30s.  By your 40s you are probably looking at the point where it goes beyond the cost tolerance of many people.  The time to do it is in your 20s.

Did you have indexation added to the PHI?    If not, you may well find that your PHI will become worthless in later years.   Although that may be offset by your medium term investing (S&S ISAs) and longer term investing (pensions).

IAMIAM

Thanks for this.
The Life insurance with CIC is probably not as good as others in todays market, but have stuck with it because of price.
The income protection was a little more price conscious when I took it out, I was always under the impression that if a doctor signs you off on own occupation, there is not much else the provider can do - so plucked for best fixed price cheapest option until age 65, presuming I could survive 6 months with no income, again this was L&G.
Ultimately, I raised the monthly income myself to avoid the price indexation, as presumed £3k a month would suffice at my peak and it seemed there was a maximum amount of £3600 anyway. To pay around £700 for both an annum seems reasonable, its a shame the Life with CIC wasn't a little more benefit, but I suppose employer Life is also 4 times my salary.