Life and Critical illness insurance for Mortgages…

Hi chaps,

Does anyone here buy life or critical illness cover when they bought their mortgage?

It’s a regulatory requirement in the US and very common in Europe, and I can see why we cross sell it here.

However, its not cheap, and does anyone actually buy it? Or do you take the risk yourself?

I have a very good package with work for personal protection, so its just my wife really (assuming I either don’t change jobs or get fired).

Cheers

Ricks

Get it. Me and my wife bought a house nearly three years ago, two years ago we found out she had cancer, one month ago she died, she was 30, genuinely fit and healthy.
I know it seems like robbery but take it from someone who didn’t get it, life in a very challenging time would be a lot easier if the worst happens to you.

Borwens – I’m very sorry for your loss.

Rickon, I took it out to cover our mortgage over 10 years ago should something happen to me to ensure he would be OK. It only costs £15/ month. As Borwens said, should the very worst happen it’s one (very important) thing less to worry about.

I’ll put my hand up before I start – I don’t sell it, but I do work for an insurer.

Life insurance is more important, critical illness is a nice addition but really bumps the cost up once you hit late 30s or want a long term. There are useful add ons with some companies that give support when you need it even if you’re not claiming and it is totally independent from the insurer.

What is staggering is the average age of a Critical illness claim is 42. Cancer makes up most of the claims, followed by heart attack, stroke and MS in that order. The number of conditions is a bit of a ruse as many are rarely claimed on, it’s cover for the main conditions you should look for.

Many more claims are paid than people think – up about 90-95% depending on company whilst customer focus groups with experience of car and house claims believe it is under 50%.

I hope that you never have to claim, but it is quite nice to see the help it can bring during serious illness and it has stopped a lot of people losing their house when income levels are threatened. Conversely I’ve also seen someone not sort something out when they moved employers and their benefit in kind stopped and they died 2 months later- at an already hard time their spouse was distraught at losing the house because she couldn’t afford the mortgage payments on her own.

Life cover is life cover – buy that online, but if you want Critical illness it is worth speaking to a Independent Financial Adviser to guide you through the options. They will be paid commission – although some will charge a fee as an alternative – and work out if they are advising on the whole market or a narrow set of insurers.

Nobody like to think about it and because you have nothing to show for it, it makes it hard to get over that hurdle to sort it out.

We have legal and General critical illness cover, we tried to claim after I was in intensive care for 5 weeks. We tried to claim under the definition of coma, which was no response for 96hours, my consultant agreed that I met the definition, and filled the claim foms in accordingly, however the insurers refused to pay out as they deemed that I didn’t meet criteria as there was ‘Some’ response over the period. Bastards. 🙂

What is staggering is the average age of a Critical illness claim is 42.

That’s a lot lower than I’d expect.

My Mums friend got cancer or similar a few years back, she called the mortgage company to explain she was a single parent and now unable to work for several months so she wanted to put a hold on the payments, after a few taps on the keyboard they told she had critical cover (she didn’t realise) and shortly afterwards her mortgage was paid in full.

I have life but not critical, at 32 its about time I sorted it…

Borwens. I’m really sorry to hear of your loss, I genuinely have some appreciation of what you’re going through and i hope you’re coping and doing whatever you need to to make through each day. I’m 5 months further down the line and while it does get easier to get through each day things are still far from normal.

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We took out critical illness cover when we initially took out the mortgage, after a few months the payments start to be seen as the lump sum mortgage payment so I stopped thinking about it as an additional payment.

My partner was diagnosed with a brain tumour in 2012 and the diagnosis revised to terminal in early 2014, within a fortnight of the revised diagnosis the mortgage had been paid off and we had a small additional lump sum. Just prior to that we had been making cuts to our finances at every opportunity. I was working less in order to spend more time with my partner but my hours were still too high to claim for a carers allowance, her sickness payments from work had stopped after 12 months (6 months full pay, 6 months half) and her benefit payment which kicked in after her sick pay stopped was around £80 per week so although we were topping up from our savings money was extremely tight.

Paying off the mortgage meant that we no longer had to worry about the financial side of things and could just make the most of the remaining time we had together, it really made a huge difference. Claire died in January of this year but thanks entirely to her financial planning I have somewhere to live for the foreseeable future and am able to take my time coming to terms with the devastating loss without any major financial worries.

Everyone – thank you so much for your thoughts. My biggest concern is if something happens to me that my missus will be OK financially.

The thought that the mortgage would be paid off, so she can focus on living her life, and that if anything did happen that we could spend as much time with each other as possible really helps me decide what to do.

Thanks again everyone,

Ricks

We have life and critical illness. My Father died when I was 2. Left my mum with nothing and no house as it was linked to his work on a farm. I will not risk that for mrs anagallis and junior. Hopefully it’ll be a complete waste of money.

Due to cost – even if you get some critical illness cover then the lump sum will cover a period of time to get better

rickon – Member
It’s a regulatory requirement in the US and very common in Europe, and I can see why we cross sell it here.

In the UK these were and probably still are forced on people by estate agents who do the whole package with mortgage and get their “independent” financial adviser on the case to sell you mortgages and insurance from a range of their selected providers they profit from.

Exactly what happened to me. Was sold a bucket load of insurances I didn’t need and lied to that they were required by the bank when they were not. Only insurance the bank required was buildings insurance.

Odd that the US requires it.

Life insurance though has advantages / peace of mind if you do have dependants (I don’t so I don’t have any).

Critical illness / redundancy insurance that covers payments etc is PPI. Everyone hates PPI in the UK, except when they can claim back for mis-selling 😉

Critical illness that pays off the mortgage would be the only other one I’d consider aside from buildings. Again though, it’s largely not required by banks even though often it’s advised it is.

All depends on wether you can afford to pay the extra costs, and can you still pay it if you loose your job, or does it then void. and youve lost all the premiums plus the benefit

We have it, and by god it came in very useful when Mrs Spud was diagnosed with breast cancer end of 2013, takes off the pressure about not earning/ mortgage bill etc. Obviously its paid out now, and we’ve not discussed what options are open to her. Well me, as I insured her and vice versa. We also have life cover. My only regret and cock up is not reviewing it in an age and pegging the policy to the mortgage.

Some harrowing posts on here, Brave people… We have life cover and i took out critical illness cover through work a few yrs ago. About a year after taking it I was diagnosed with prostate cancer (10 months ago) . Whilst the cancer was a qualifying condition the medical assessors said it was a ‘pre-existing undiagnosed condition’ and knocked it back. Beware the small print, virtually any illness could be classified the same. Legal & General 😯

Haven’t tried to appeal it but sometimes wonder whether I should try a no win no fee outfit ?

I’m a perfect example then, 42yrs old and had a heart attack whilst @ bike park Wales, critical illness insurance on my mortgage paid out 114k
Which made things a lot easier especially when I had been made redundant 2 weeks prior to the heart attack, handed control of the money over to my wife, as I’d of just spunked it up on gucci plastic bikes