Life Insurance / Income Protection / Critical Illness

HyperSpace88

 My husband is a police officer so there's no chance of redundancy 
Due to the nature of the job, he could end up in a situation, where mistakes are made. There are people wind up police officers and baiting them.... 

wishinghome

HyperSpace88 said:

 My husband is a police officer so there's no chance of redundancy 
Due to the nature of the job, he could end up in a situation, where mistakes are made. There are people wind up police officers and baiting them.... 

But that's different to redundancy which is what I mentioned. Police can't be made redundant. Obviously they can be fired if they break the law in which case I highly doubt any income protection policy would be paying out!

Jemsnation

I thought I would jump in on this thread rather than start another as I have the same question though my circumstances are different.
I am about to buy my first property and looking into the amount of cover I need as a single person with no dependants. 
There seems to be a big divide amongst people when it comes to critical illness. Some saying it's a giant waste of money, others saying better safe than sorry and the rest saying it's totally worth it, if you make a claim that happens to be paid out, otherwise it's not(!)
Realistically, as a 35 year old single person with no children, do I need Income Protection PLUS Life Insurance PLUS Critical Illness? All 3 seems a bit excessive.

curlywurly82

Hi, I'm in a similar situation. You can take out a lower lever of critical illness cover which can be a lot cheaper. For me taking out life to cover the mortgage and critical illness to cover 5 years of payments was half the price of having both life and critical illness cover the total mortgage. 

dunstonh

There seems to be a big divide amongst people when it comes to critical illness. Some saying it's a giant waste of money, others saying better safe than sorry and the rest saying it's totally worth it, if you make a claim that happens to be paid out, otherwise it's not(!)

Big divide in amongst people who probably know little or nothing about the subject.

Some people say anything is a waste of money.   Some people insure their mobile phones but not anything more important.   You need to be careful of the type of person you asking the question of.

Insurance is a cost and if you get to retirement and have paid all that money and have never claimed then you may feel it was a waste.  If you suffered a claimable event then its the best thing you ever did.

Realistically, as a 35 year old single person with no children, do I need Income Protection PLUS Life Insurance PLUS Critical Illness? All 3 seems a bit excessive.

It doesn't sound like you need life assurance as nobody is going to be worse off in the event of your death.  Income protection (PHI version) is more important than CIC.

All three are not excessive. They all cover different things.   If you include house insurance and car insurance then its 5 insurances.   Is that excessive?

Jemsnation

Perhaps excessive is not the right word. I just wonder if perhaps in my circumstances all 3 are a bit much. This can always be looked at again if/when things change. I don't want to overstretch myself with monthly payments so trying to figure what I really need right now and what can wait. I feel like income protection is very clear cut and a necessity but critical illness doesn't seems as straightforward.

dunstonh

I feel like income protection is very clear cut and a necessity but critical illness doesn't seems as straightforward.

I would put income protection above CIC.  However, we see far more claims on CIC going through than income protection or life assurance.    So, there is an element of a gamble if you want to select limited coverage.    That is why its difficult to tell you not to do something or do something different as you wouldn't thank us if we said not to bother with CIC and then 3 months down the road, you suffer a claimable event.

Weighty1

Jemsnation said:

Perhaps excessive is not the right word. I just wonder if perhaps in my circumstances all 3 are a bit much. This can always be looked at again if/when things change. I don't want to overstretch myself with monthly payments so trying to figure what I really need right now and what can wait. I feel like income protection is very clear cut and a necessity but critical illness doesn't seems as straightforward.

I'm with Dunstonh in that I almost always put income protection above critical illness cover in the heirarchy of priorities.  However, imagine the situation where you are diagnosed with a critical illness that causes severe mobility issues, so Parkinson's, MS, paralysis, loss of a limb.  Having a lump sum of money paid out could be invaluable to enable you to adapt your home so that you can continue living there.  Whilst having a regular income will maintain your lifestyle, having a lump sum of money provides the financial flexibility to adapt to your new circumstances.  Different products, covering different needs, but if you can only have one of them then income protection is the way to go in my mind.

Jemsnation

Thank you.

I think another thing putting me of Critical Illness is that when my mum put in a claim after a cancer diagnosis, it was denied. The type of cancer she had was not critical enough apparently.

So maybe I will go for minimal CI for now and up it as and when I can afford to.

dunstonh

I think another thing putting me of Critical Illness is that when my mum put in a claim after a cancer diagnosis, it was denied. The type of cancer she had was not critical enough apparently.

Like most insurances, you can effectively put CIC plans into budget, standard and comprehensive (as you can with income protection).  So, it is important to look at the quality of the coverage and not just the premium. There is a massive difference in the number of conditions that can be covered across the various plans.