Critical Illness 10 year review

Eric_Pisch

I have a Barclay's critical Illness policy thats just had its 10 year review

http://www.barclayslife.com/criticalillness.aspx

and surprise surprise they want to double the premium or half the amount covered

Are these policy's worth having? (I'm self employed and on a scale of 1 to 10 for fitness I'm a 0 loool)

Is £60ppm for 120k cover a 40ish yo person who wouldn't pass a physical in a million years good value?

Or are there other better options available.

dunstonh

It is one of the risks of going with a reviewable policy. Had you chosen guaranteed you would not have had this price review and 10 years ago, the price difference between reviewable and guaranteed was almost non-existent. We cant change the fact that you were paying more for a reviewable plan than a guaranteed plan because of where you bought it but maybe others reading will take notice when they come to buy.

Part of the problem you have now is that you will have an old policy with better definitions and coverage than most modern plans. So, you need to decide if rebrokering to get cheaper for less cover is worthwhile. Also, your health may impact on the premiums as well as the ability to insure.

Are these policy's worth having?

Typically over 80-85% of claims are paid out (compared to over 80% being rejected for PPI). Statistically, 1 in 6 will suffer a claimable event before retirement (life assurance is 1 in 5) so the odds suggest its worth having.

You are self employed so you have a few issues to consider in your financial planning:
1 - Its harder for you to qualify for sickness benefits from the state
2 - you have no employer sick pay
3 - you get lower state pensions than an employed person.

So, you would expect a self employed person to pay more in life assurance, income protection (inc CI) and pensions than an employed person.

Eric_Pisch

Many thanks for the response, I'm just a typical person who never takes much notice of anything financially in life, hence I have made massive savings after finding this site!

I don't recall the sales person mentioning reviewable / guaranteed policy differences...

If I cant get a better policy I guess then I will just suck up the increased premium and put it down to experience

dunstonh

I don't recall the sales person mentioning reviewable / guaranteed policy differences...

As you say, you didnt see a financial adviser but a salesperson. The sales reps at banks only have the one type available and therefore dont need to mention what others may have available. You should have seen a financial adviser.