Critical Illness Cover

Ask anyone who has claimed. Around 1 in 6 will have a claimable event before retirement. Life cover is around 1 in 5 so there isnt much difference.

As long as your policy is comprehensive and guaranteed (rather than core conditions and reviewable) and you didn't buy it from a bank/building society, then you should have good value.

If budget limited I would always check out long term Income protection ( PHI) prior to crit illness

I doubt Martin makes any recommendation in an area that is regulated from an advice point of view Suggestions on what to investigate may be a better way of wording it.

Advice areas are often prioritised (with the company in question interpreting the FSA guidelines) and I know advice companies that have CI above PHI and the other way round. Personally, I work on the basis that they are both in the illness area and have equal pegging in second place behind life protection. It really depends on occupation, affordability, exisiting benefits and goals as to which turns out best at the end of the day.

PHI provides income after a deferment period. Its quite possible to suffer a critical illness and be able to return to work within 6 months. A PHI policy with 6 months deferment would pay nothing. A critical illness policy would pay out the lump sum. My youngest claiment was aged 26 and only had a few weeks off work in total. She got mortgage paid off and additional lump sum. A PHI policy would have paid nothing.

However, the reverse also works. What happens if you dont suffer a critical illness but have a long term illness? CI policy would be no good but a PHI policy would be.

so many critical illness covers are so specific in what they cover and don't cover and are hard to claim from

Income protection policies are potentially worse than CI policies in that respect. The issues with CI policies are making sure you get a provider that covers a comprehensive range of critical illnesses (rather than just a core cover policy) and that the policy is guaranteed and not reviewable.

PHI policies have different ways of deciding what is an illness. Some of these can be tasks related, some of them are on a doctors report.

dunstonh wrote:

Advice areas are often prioritised (with the company in question interpreting the FSA guidelines) and I know advice companies that have CI above PHI and the other way round. Personally, I work on the basis that they are both in the illness area and have equal pegging in second place behind life protection. It really depends on occupation, affordability, exisiting benefits and goals as to which turns out best at the end of the day.

Agree with DD on the points mentioned in his post (above), but wonder about one factor on there that may not put life cover as 1st priority. DD absolutely correct the different companies place PHI & CIC in different 2nd & 3rd place and I would put them equal 2nd as a professional adviser.

Small point though, but I personally would not always put Life Cover has a high priority. Single person with no dependents and no wish to leave assets on death, I would put CIC (Critical Illness Cover) & PHI (Permanent Health Insurance) equally 1st.

However, due to relative costs and the possibilty that circumstances could change for that person, a lot of times, these clients may just take up the Life Cover within the package anyway.

Given the massive difference in cost between Life Cover & CIC, there is a very good reason to go for CIC if affordable (as long as with comprehensive coverage as already stated). This is more expensive because it has more potential to cost the Life Company, therefore, meaning more chance of a claim on that type of policy.