Life and critical illness insurance

[Too Late]

Hi all

I think it's about time I'll (32) that I look at life and critical illness cover. My wife and I have always talked about it but never done anything about it. Seeing as we are about to have our second child, I think it's time I pulled my finger out and got insurance sorted

I have never bought insurance like this. What should I look out for. Anything I need to include and not include? It looks like a minefield and I can easily pay £200 plus from some of the quotes I have done.

Any tips Or insurance recommendations would be great

Thanks

[andy118run]

Probably some real experts on here who will guide you.

However, FWIW I pay around £40 per month for my life insurance which includes critical illness cover.

Its worth decreases each year as my mortgage decreases. I think it would pay out around £140,000 at present which more than covers my mortgage,

I know people who pay quite a bit more and others who pay less. It is a confusing area and I used a financial advisor at the same time I took out my mortgage.

[Too Late]

Thanks for the reply.

Looks like I need to keep getting some quotes.

Thanks
Nick

[Too Late]

First quote. £60pm give us 80k r 120k payoff on the mortgage

Biggest quote was £200 pm...

[tjl]

Try the finance thread perhaps ? That's where I've seen similar topics.

[dalenorth]

You’ll potentially need life and cic to cover the mortgage, family income benefit to provide an income until child dependency and maybe look at income protection too.

We’re brokers and have helped many Phrs so drop me a pm and we will help you out.

Dale

[andy118run]

swerni said:

Why would you link critical illness to mortgage amount?

Have not much idea on these matters.
I'm guessing if I'm too ill to work and my sick pay runs out (after 6 months i think), then the CIC cover can be relied on to pay my costs of living and keep a roof over our head etc.
I always assumed that's what CIC does.

[dalenorth]

Cic can pay out a lump sum or annual income, to cover things like, paying the mortgage off, looking after children, paying for medical treatment etc.

The top 5 claim areas for critical Illness are cancer, heart attack, MS, children’s cancer and stroke, so quite brutal effects on the individual and their families.

Cic varies hugely on which provider so beagle street and L&G basic fall very short of Royal London, AIG, Aviva upgrades etc. It is in all honesty a very complex area.

[dalenorth]

Sorry but decreasing does make sense if it’s to cover a repayment mortgage, or it means that you can have a higher level of cic if it has to fit within a budget.

[dalenorth]

Yes that’s right on a repayment mortgage the balance reduces over time so the policy sum assured would also reduce inline.

[mcbook]

Here's a run-down of what I have and how much it costs. All provided by Aviva through an employer-run flexible benefits scheme.

Income protection (5 years at 67% salary, paid for by employer): £41.62 pcm I'm thinking about extending this to retirement age at an additional £25 pcm

Critical Illness Self (£100k lump sum): £9.40 pcm

Critical Illness Partner (£100k lump sum): £11.40 pcm

Life Assurance self (£220k lump sum, paid for by employer): £19.62

Life Assurance Partner (£100k lump sum): £4.52 pcm

[dalenorth]

No the mortgage payments don’t reduce, the balance does.

So let’s say someone pays £100 pcm for a level policy over 10 years, the cover will stay at 100k

Alternatively someone pays £50 pcm for a decreasing policy to match there mortgage type and only have say £10k cover in year 10. There mortgage balance would also be £10k and they use the money to pay off the liability.

[FredClogs]

I've just redone, largely because I'd had my critical illness for 10 years and in that time the market and cover has changed, so I've gone from 42 illnesses covered to 62 with AIG. The premium has gone up as expected but not by a massive amount.

I pay £54pm for 200k level term life (about a tenner of that) and £100k of critical illness, I'm 42 and that will take me to 58 when the mortgage is due to end (hopefully will be paid off before then).

I did a fair bit of research and talked to 3 brokers, i also got hold of the brokers critical illness comparison report, because not all policies are the same, you need to know what level of cover you have, especially for stroke, cancer and heart issues... If you pm me I'll forward it to you.

[dalenorth]

Yes AIG do a great policy which ranked number one until 12 months ago for most individuals. Providers terms change constantly which means the consumer can continue to upgrade as long as poor health isn’t a factor.

Level term is good but let’s say someone only has £100 pcm to spend and takes £100k level life and cic, and uses their full budget but has three dependant kids. Said client dies or is incapacitated and only has £100k lump sum. If they had taken £100k decreasing to cover their mortgage life/cic and taken £30k per annum life only family income benefit until their kids become dependent then which position would you rather see your family in?

I am biased and and it’s good that people get themselves cover but I really think this is an area that requires advice for most.