Sold income protection and critical illness

hbcox

Hi all
My IFA sold me income protection and life and critical illness cover for my mortgage which at the time I thought I needed.I have now learnt that if you have income protection you do not need to have critical illness just life assurance as the income protection covers me for just about every illness or accident which could prevent me from working.Have I been mis-sold a product I do not need and can I claim anything back as I am over covered?
All advice greatly recieved

Cheers Matt

BeeUK

Ideally you should ask your adviser to talk to you about this before you make any decisions...

CI and IP are "similar" but by no means the same!


Say you shattered the bones in your leg in an accident...you would not be covered by you CI policy for this...but as you would be unlikely to be able to work, your IP would provide an income (providing you have own or any occupation IP).

There are certain things your CI would not cover you with where your IP will.

_Andy_

hbcox wrote: »

Hi all
My IFA sold me income protection and life and critical illness cover for my mortgage which at the time I thought I needed.I have now learnt that if you have income protection you do not need to have critical illness just life assurance as the income protection covers me for just about every illness or accident which could prevent me from working.Have I been mis-sold a product I do not need and can I claim anything back as I am over covered?
All advice greatly recieved

Cheers Matt

Matt

You haven't been mis-sold at all. CI and IP are two very different products.
Clearly at the time you felt they were important enough to take out.
You may have read Martin Lewis' views on CI on this site which quite frankly I find quite dangerous advice (the implication being that all CI policies are bad, expensive, not needed, etc, etc..)

It's easy to say you 'do not need to have critical illness' until something happens.
E.g. - my dad had motor neurone disease. An income protection policy wouldn't have covered the lump-sum costs of things like converting a downstairs room into a wetroom, the cost of an electric wheelchair, special computer/speech software, carers costs, etc etc...

If you feel your policies are affordable I'd suggest keeping them all.

CI premiums rise as you get older so if you're reasonably young then definetely keep it.

That said, if affordability is a particular issue, I would recommend keeping the income protection plan over the CI.

Andy

Debt_Free_Chick

hbcox wrote: »

Hi all
My IFA sold me income protection and life and critical illness cover for my mortgage which at the time I thought I needed.I have now learnt that if you have income protection you do not need to have critical illness just life assurance as the income protection covers me for just about every illness or accident which could prevent me from working.

Matt

An income protection policy pays you a regular income, if you are unable to work due to illness, accident or injury.

A critical illness policy pays you a lump sum if you are diagnosed with a "critical" illness.

Diagnosis of a CI might not prevent you from working. You might be able to continue to work, with treatment. So the IP policy would not pay out, as you are able to work.

If you are not able to work, then the CI policy might not pay out. You might have had an accident which prevents you from working for a while. So the IP policy would pay out, but the CI wouldn't.

They cover different situations and properly structured, they compliment eachother.

TEDDYRUKSPIN

What..................??? They the same? Who told you this.......?

Matt......... Matt...... Matt...........

Critical illness cover is not the same at all. Critical illness cover provides a lump sum amount if you are diagnosed with a serious illness such as cancer, heart attack with permanent symptoms, multiple sclerosis and anything that causes none reversible events.

Income payment protection or permanent health insurance provide 50% of your gross monthly income. This usually expires at the end of the term of the mortgage or at 60 or 65 years old. This provides INCOME only. You can make a claim on this as long as you can't carry out your occupation. Note: You have to be employed!!!!!

Now, how can these be the same?

ANSWER:

Critical illness cover can be used to pay of the mortgage or provide a lump sum for medical treatment or adjustments to your home. Please note, critical illness does not mean you are going to die!

Income payment protection can be used for such as when some one who will be constantly off work. Such as kidney dialysis or anything that long term.

SOLUTION:

That person who told you such be told off. If he is an advisor he/she should be removed the right to become one.

THESE COVERS ARE NOT THE SAME!

hbcox

Cheers for the replies

I now realise that I have not been mis-sold anything.I thought the CI just paid the mortgage not gave me a lump sum if it have one of the specified conditions.I now just feel that I might be over-covered as insurance is not ment to make you better off if you need it but stop you loosing your house and still be able to live and pay the bills and I feel that income protection does offer me that

jonesMUFCforever

I still think you don't get the point.

Let's assume (I hope it never happens to you) that you are diagnosed with cancer and let's say its terminal.

What do you do with the lump sum from the CI policy?
For starters I would not pay my mortgage off as the Life policy will do that when you die.
You could use the money to do all those things you and your family had always wanted to do but never had the time or money.

IMO you can never be really over insured.