Life insurance and Critical Illness

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Ciderarmy1987
Ciderarmy1987 Posts: 451 Forumite
in Insurance & life assurance
My wife and are are hopefully moving house soon and are looking at updating the cover that we have through Life and Critical illness polices.

We are finding it really hard to know what levels of cover we should go for.

Has anyone got any useful advice or links to any good guides?
Now buying our second house:
Accepted offer 16/12/18. Offer accepted 26/1/19. Buyer pulled out 4/2/19. Accepted new offer 13/2/19

FTB: Offer accepted 23/2/2013 Mortgage application 28/2/2013 Valuation: 4/3/2013 Valuation ok 15/3/2013 Mortgage Offer 21/3/2013 Exchange 10/4/2013 Completion 26/4/2103

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  • Weighty1
    Weighty1 Posts: 1,181 Forumite
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    Firstly, I'd suggest looking at long term income protection cover, simply because most people can't survive without an income and just because you have critical illness doesn't mean you'll be able to claim just because you are long term sick (the most common causes for long term sick as bad backs and mental health conditions, neither of which would be claimable on a critical illness policy).

    Beyond this it is very much dependent on individual circumstances. If you have a mortgage, children, how one of your deaths would affect the other etc etc etc.
  • dunstonh
    dunstonh Posts: 116,376 Forumite
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    I concur with above. PHI is generally above CIC in the pecking order of priority. (permanent health insurance - generic name for "proper" income protection - note there are plenty of plans that call themselves income protection but are not of the PHI variety and are almost useless)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Ciderarmy1987
    Ciderarmy1987 Posts: 451 Forumite
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    dunstonh wrote: »
    I concur with above. PHI is generally above CIC in the pecking order of priority. (permanent health insurance - generic name for "proper" income protection - note there are plenty of plans that call themselves income protection but are not of the PHI variety and are almost useless)

    We are both teachers so have 100 days full pay and 100 days half pay cover through our work so income protection so it doesn't seem worth taking out cover for this when we already have these benefits from our work
    Now buying our second house:
    Accepted offer 16/12/18. Offer accepted 26/1/19. Buyer pulled out 4/2/19. Accepted new offer 13/2/19

    FTB: Offer accepted 23/2/2013 Mortgage application 28/2/2013 Valuation: 4/3/2013 Valuation ok 15/3/2013 Mortgage Offer 21/3/2013 Exchange 10/4/2013 Completion 26/4/2103
  • dunstonh
    dunstonh Posts: 116,376 Forumite
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    Ciderarmy1987 wrote: »
    We are both teachers so have 100 days full pay and 100 days half pay cover through our work so income protection so it doesn't seem worth taking out cover for this when we already have these benefits from our work

    And what will do you after 200 days?
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ACG
    ACG Posts: 23,727 Forumite
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    Ciderarmy1987 wrote: »
    We are both teachers so have 100 days full pay and 100 days half pay cover through our work so income protection so it doesn't seem worth taking out cover for this when we already have these benefits from our work

    The average claim on Income protection is around 8 years according Aegon or 4 years with aviva, working off the lowest that is still 9 times what your sick pay would pay out for.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Aretnap
    Aretnap Posts: 5,215 Forumite
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    Ciderarmy1987 wrote: »
    We are both teachers so have 100 days full pay and 100 days half pay cover through our work so income protection so it doesn't seem worth taking out cover for this when we already have these benefits from our work
    That's good. It means that you can go for a policy with a 6 month (or thereabouts) deferral period - meaning that it won't start paying out until you've been off for 6 months. That will make it cheaper than one with a short deferral period. (If you have significant savings, you might want to consider a longer deferral period).

    However as above, 200 days of pay will be cold comfort if you develop long term health issues which prevent you from working for years. PHI would keep paying you an income until you reach retirement age - which is why it's potentially so valuable.

    Also, what's the single most common cause of long-term absence for teachers? I'm going to stick my neck out and guess that it's stress. It wouldn't get you a penny from a critical illness policy, but would be covered by PHI.
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