Life and critical illness insurance?

soplum

Hi all,

My partner and I are almost done buying our first home!

We have agreed on a life level term policy so that we will get a lump sum at the end that has not decreased. However we are unsure about getting critical illness cover.

In short - we know it is a good idea to get it however just for £30k it is a massive hike in price just for £30k...

I am a teacher and my partner works in retail, both mid 20s, good health, no smoking, no kids.

Are there any tricks to getting good critical illness cover at a good price?

So far best quotes are: 

£225,000 lump sum upon death life level (45 years cover) - £9 a month 

£225,000 lump sum upon death life level AND critical illness cover payout of £30,000 (45 years cover) - £17 a month 

TIA

Sandtree

Personally not a fan of critical illness as a product and would suggest looking at income protection/PHI before thinking of CI. 

As to tips... just make sure the quote is coming from a whole of market independent advisor/broker... it may not make much sense but tied agents not only can only quote from their tied provider(s) but even for those they are often higher prices/more commission... if its your mortgage broker then dont automatically assume that just because they are whole of market for mortgages that they are also the same for insurance. 

lassfarfromhome

Income protection is much more important than Critical Illness.  It will pay you a monthly income if you cannot work, and the best policies pay out until retirement age.

csgohan4

I fyou can afford it, get CI, but I personally put the saved premiums into maxing out the Income protection/ life assurance

Weighty1

soplum said:

We have agreed on a life level term policy so that we will get a lump sum at the end that has not decreased. 

Just to make sure you haven't misunderstood, you would NOT get a lump sum at the end, unless you died the day before the policy ends.  These days life insurance policies only pay out if there is a claim, NOT if you survive the term over which you are covered.

Personally, I'd recommend you look at a decreasing term life insurance policy as this would be a bit cheaper than a level plan and would therefore allow you to direct more of your budget towards the cover you are more likely to claim on ie. critical illness or has been mentioned, long-term income protection.  As those above, long-term income protection would generally be seen as the better option due to the fact it covers anything which causes long-term inability to work.

There are no tricks to getting cheaper quotes, they are what they are, especially for life insurance and critical illness cover.  There's more flex with the income protection becausee you can choose younger retirement age on the plan, extend the deferred period before it starts paying out or even have a plan which only pays out for a limited period BUT it's about getting the cover you need more than anything else.

Aretnap

Best trick for getting a cheap quote for critical illness (or life cover) is be young, be healthy and don't smoke. It's not like car insurance where you can add your mum as a named driver to get it a bit cheaper.

Be aware that not all critical illness policies are the same and you should not choose on the basis of price alone. The policy pays out if you are diagnosed as having one of a pre-determined list of conditions at specified severity - and the pre-determined list varies significantly from insurer to insurer. I believe that the ABI recommends a bare minimum list of illnesses that CI insurance should cover, however the better providers go well beyond the bare minimum; the cheaper providers not so much.

Also be aware that there are a lot of serious conditions which will not be covered by any CI policy, even if they do stop you working? What's the biggest reason why teachers go off long term sick? I don't know but I imagine stress ranks pretty high on the list. Stress/anxiety/depression would not be covered by CI insurance, but would be fully covered by income protection cover, which is one of the reasons why most people would regard income protection as higher priority than Critical Illness.