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Critical illness payout

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  • dunstonh said:

    You are missing the fact that the person without a mortgage hasn't had the financial need to pay extra for life assurance/CIC and that there is no requirement to buy life assurance/CIC.   As someone has chosen to use their money to protect themselves that is considered a good thing and reduces pressure on Government spending.   
    Hi dunstonh, thanks for taking the time to reply.

    Whilst I appreciate some mortgages require Life insurance/CIC, I can't see how that justifies the disparity in outcomes here.

    In terms of the cover amount, I also can't see how it's going to be very different. The homeowner would need to cover the loan amount and the tenant would need to cover rent for his partner/children. The assumption here is that the objective in both scenarios is to secure a home for the bereaved families.

    Fully appreciate I still might be missing something here, but it still strikes me as unfair. A family with a mortgage gets to sink the CIC into the mortgage, increasing equity, and gets to retain their UC claim, whilst the tenant loses their UC claim entirely.

    Setting my perceived disparity above aside, there is also another aspect of this that seems somewhat unfair. Consider two different families in the same situation. Both come into the same sizeable amount of money that would disqualify them from receiving UC. For argument's sake, let's call it 20k. One family has won the lottery, and the other has received CIC cover payout that will need to be put toward covering the costs of the illness. From the DWP's perspective - as far as I know - there is no difference here.   
         
    I understand the 16k upper capital limit strikes a balance between protecting the less well-off and protecting the taxpayer, but it doesn't seem to consider cases where the capital has been paid to help deal with the financial implications of a serious illness. 

    Anyway, rant over, if you got this far, thanks!

                  


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