Life and Critical Illness Insurance – your advice/experience please

Recently the missus has been getting twitchy that we “need” some life insurance and critical illness cover.

We’re getting to the age and responsibility where it makes a degree of sense: we both turn 40 next year, both earning, still 200k left on the mortgage, and we have two young kids (4 and 1).

But having looked into it and got quotes we feel very uneasy about the whole thing. It seems like a LOT of money to be paying out for something that seems to be absolutely riddled with get-out clauses and conditions.
I’d hate to pay out all that money only to be told I had the wrong type of cancer or some nonsense.

What sayeth the panel? What sort of cover do you have in place?
Good/bad experiences of payouts etc?

The two things Life and Critical Illness are quite different and the costs of the latter are much higher than the former. Personally I have only ever bought the former due partly to cost and concerns over payout terms and partly due to feeling we had the financial circumstances not to need to the Critical Illness (ie we took the view we would downsize/move to a cheaper area). You might look at specific cover for your mortgage, some or all of it as a comparison.

Also try brokers for better deals (look on money saving expert, they have a good article).

The same cover with same underwriter varied wildly (2x) in price depending on who arranged it!

Life assurance – essential if you have dependants and debts.

Critical illness – expensive for poor cover IMHO. Only worth it if you have no-one who can help out (parents, etc) in the event that one of you is seriously ill, or maybe if self-employed.

My general rule about insurance is that if I can live with the downside if things go wrong, and if I’m not legally required to buy it (e.g. car insurance), then don’t buy. Stuff I do buy is home + contents, car, life and travel. That’s it.

I’ve both, more cover for Life than the Critical side.

You never know what may be around the corner and I’d rather know loved ones are sorted.

Friend has just been diagnosed with a brain tumour. Will be out of work for the next 6-12 months after op. He didn’t have Critical illness cover and will be struggling.

You pay your money and take your chance.

Firstly, why is your other half so keen to get you insured?

Otherwise, as said above, various options to look at. Will you be able to pay the bills on one salary in the event of a critical illness? Especially if the other has additional caring responsibilities for you and the kids?

Get independent advice though, not our opinions. (Says the guy who ended up drafting a policy amendment for the life insurers after they refused to cover my wife as she was born with cerebal palsy. Useless mainstream underwriters)

In a similar situation with two young kids and I decided to go with life assurance only.

I found Cavendish online to be very helpful and gave the best quotes.

http://www.cavendishonline.co.uk/

Can you not get them through work – would be much cheaper?

We get something like 3.5x salary on death and 80% salary for life if unable to work through illness.

I’ve got full income protection that covers redundancy (for 12 months) and inability to work due to sickness/injury etc (until I return to work, or I turn 50, whichever is sooner).

I’ve also got death in service benefit through work which is OK (think its 5x salary), but looking to top up with life insurance, so will follow this thread…

I have this bookmarked to read (I need to sort life insurance too)

http://www.moneyexpert.com/news/barclays-bring-out-revolutionary-life-insurance-clear-cut-product-for-customer-satisfaction-says-sergeant-review/800582943?affiliateID=405&campaign=EM2046A

if you had a machine in the corner that churned out 30k p/a (or whatever you earn) that you’d defo insure it against theft and/or breakdown. It’s becomes even more important if you need both salaries to support the mortgage or if one salary is hugtely greater than the other.

That isn’t really comparable though is it? If you had a machine that will start churning out £30k only if you die before a set date would you insure it?

Top tip I was given – check out the cost of individual policies for both you and your missus – ours were only a couple of quid more than a combined one, and you would get two payments if both of you went. That would allow the kids a mortgage free home from one death and enough money to cover them with the next (e.g. costs for next of kin looking after them etc.).

Assume you’ve not got any death in service type cover at work?

Looked at it a while back Graham – when we were in similar ish situation as you (well, not quite as balanced an income..)

Would also say to those of you suggesting Death in Service through work – consider my situation as below, was getting decent (4x) cover through work, then got made redundant == 0x0…

Did in the end get a very nice man from our solicitors to look at, and organise life insurance – also power of attorney, re-drafting will to take into account guardians, other house-keeping stuff. It was also around the time I got made redundant and had had major surgery; so the old “work will pay” stuff didn’t apply, or might noir, but also medical history started to play a part too; critical illness and time off work cover is really expensive – I suppose it’s more likely – and we went without, resolving to simply save more into pensions and just generally put more aside.

hope that helps…

I’m also looking into life and PHI at the moment. Went self employed 6 months ago having always have life insurance through work. Haven’t got kids yet but being self employed means I need some cover for major health problems.
Unfortunately I suffer from Atrial Fibrillation which means most insurers won’t touch me and those who will want ridiculous premiums – £50pm for life insurance.

That isn’t really comparable though is it? If you had a machine that will start churning out £30k only if you die before a set date would you insure it?

Only if you love your family I suppose 🙂

This is quite a good tool showing where your insurance risk lies…while Life & CIC are undoubtedly important it may give you other areas that you’ve not thought of/considered.

This is quite a good tool showing where your insurance risk lies…while Life & CIC are undoubtedly important it may give you other areas that you’ve not thought of/considered.

Bit scary:

Untitled by brf[/url], on Flickr

I could be dead by Thursday!

So what on earth do they calculate that by? Utter tosh. No questions about diet, prior medical history, family medical history, fitness, alcohol intake, drug intake etc.

Just insurance company scaremongering.

Just insurance company scaremongering.

Yep!

Just insurance company scaremongering.

Pretty much agree with that. Whilst I can understand not taking things like diet and medical conditions into account, as it would make it massively complex, to not account for something like “do you have any dependents” is particularly poor. In the past friends have always been shocked when I told them that I had no life insurance but as I have no dependents quite frankly I can’t see any need for any.

*self moderated*

As a guide to starting your insurance journey and opening the conversation about insurance needs this is actually an exceptionally good tool. If they were scaremongering those stats would be far higher (and for the more expensive policies).

Is it not better to understand where your risk is and planning accordingly, rather than simply “buying” a product because you “think you should” which may or may not be what you actually need.

For instance – most people will buy life insurance without thinking about it, yet on footflaps’ example he/she is only 7% likely to prematurely die! Much better to instead look at putting income protection into place…obviously all these things need advice to accompany them and personal circumstances may dictate that yes, those stats are wrong, but for the majority they’ll be in the ball park.

Annoyingly for me it seems that getting covered for death wasn’t too bad. I’ve got good Death in Service benefits with my employer, and the mortgage is covered if the worst happens.

However, trying to get some kind of cover that will protect me if I can’t work is chuffinglydamnexpensive. My profession, seafarer, is one which requires a medical check and approval every 2 years, and there are numerous ways in which my qualification could be rescinded if my I don’t meet the required physical standards.

So I could possibly end up unable to pass my medical (blind in one eye, loss of a limb, deaf in one ear, certain medical conditions), but perfectly able to continue working, just not in my well paid and rewarding career. No reasonably affordable cover yet found!

valid points above.

Also understand what income would disappear if you were ill/unable to work. If you are a landlord probably none of it as rents come in regardless.

You may not need as much protection as you need.

I think if I was looking for cover I would look at what my living costs are, total income, perhaps just cover the immediate needs.

An alternative would be to build a pot of cash & keep it handy.

This is tricky stuff and as my wife has already lost her earning ability i can see why people want to cover themselves. In some ways its too late for us as we re down to 1 income making money tighter for insurance

We get something like 3.5x salary on death and 80% salary for life if unable to work through illness.

This sounds brilliant. But that doesn’t describe critical illness cover. The policy i read was great, if you got cancer. But the disability level for pay out was very tough. As i understand it the common reason for being off work our bed backs and stress, these aren’t covered by the policy I looked at

A friend of mine suggested that a good compromise is to go for income protection, but at lower level Say bills and mortgage

As already stated above look closely at anything through work. What happens if you are dismissed for being off work sick?

interesting thread this. Were just looking into this as a couple with a crippling mortgage its worrying what will happen in the future. We really are not sure what we need to be looking at.

Not sure if any one else has said this but ….

Get some…. it will be a waste of money….. hopefully

🙂

My coma wasn’t the right type of coma to pay on my critical illness cover.

Hi op

This may or may not be of any use to you but I do this for a living and understand the ins and outs of each product and the insurers that offer them.

Id be happy to have a chat with you to help you understand the do’s and dont’s and the risks and benefits involved with each product and provider.

let me know if you fancy a chat sometime cheers paul