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    Any experts out there RE critical illness

    Posted by lutonsteve2 on 9/6/2019, 23:21:52

    Applying for our first mortgage and they're pushing us in to critical illness insurance.

    Do people have it as part of their jobs or is it important to purchase it with the mortgage?

    Cheers in advance!

      Re: Any experts out there RE critical illness

      Posted by J in C on 10/6/2019, 7:22:31, in reply to "Any experts out there RE critical illness"

      Have 2 one for me and my wife as you get older you may aoeexuate you have it.

      Re: Any experts out there RE critical illness

      Posted by HH on 10/6/2019, 7:08:58, in reply to "Any experts out there RE critical illness"

      Income Protection is better in that it covers you for a salary payout if your doctor signs you off work for any reason.

      Critical illness is OK but you only receive a payout if you suffer one of the illnesses on the plan, and there's a lot of stuff which you can be off work for which won't be covered.

      I took some stuff out through Lifesearch recently, they were much cheaper than what my mortgage provider offered and explained it all. They also sent out this for which compared all the critical illness plans out there and told me which one gave me the highest chance of a payout.

        Re: Any experts out there RE critical illness

        Posted by Sandgrounder on 9/6/2019, 23:59:52, in reply to "Any experts out there RE critical illness"

        Some of the things you could opt for:

        Income protection - pays out a regular income if you are unable to work due to illness - this can help you continue to pay your mortgage as well as cover other expenses. A longer deferred period (number of weeks til policy pays out) will be cheaper - check what sick pay you get to see what deferred period you need. Get ‘own occupation’ cover - ie it will pay out if you can’t do your own job, not just any job (check definitions)

        Critical illness cover - will pay off your mortgage if you are diagnosed with one of a defined list of critical illnesses (decreasing cover is cheaper and is fine for mortgage as the size of the loan will shrink over the years as you pay it off)

        Life cover - again, can set it up so it pays off your mortgage if you die, meaning your surviving partner doesn’t have to worry about that. Could opt for decreasing cover as well if taking out solely to cover your mortgage.

        While there is some overlap, there are benefits to taking out all 3 (eg you might die by being run over by a bus, not from a critical illness; critical illness cover will pay off your mortgage, but what about other expenses you will need an income for?)

        Obviously take proper financial advice!

          Re: Any experts out there RE critical illness

          Posted by The Outsider on 10/6/2019, 0:20:54, in reply to "Re: Any experts out there RE critical illness"

          Obviously take proper financial advice!

          He has done - he has asked on Outlaws

            Re: Any experts out there RE critical illness

            Posted by Sandgrounder on 10/6/2019, 0:04:17, in reply to "Re: Any experts out there RE critical illness"

            And if you have an independent financial adviser, they will be able to search the whole of the market to find the best policies for you, definitely worth the investment

            Re: Any experts out there RE critical illness

            Posted by The Outsider on 9/6/2019, 23:53:40, in reply to "Any experts out there RE critical illness"

            When you say Do people have it as part of their jobs, some companies may provide this sort of cover for their employees but it is certainly not a standard thing by any means. From the lender's point of view, they are looking at how you would continue your repayments in the unfortunate situation where you had a serious illness which meant that you couldn't work. This could take the form of critical illness or income protection policies. Some would pay a lump sum on diagnosis. Others pay a monthly amount once you have been off work for a certain time.

            In the same way, they would expect you to take out a life assurance policy to repay the mortgage if you were to die. This could, possibly, be done on a basis which insures you on a reducing balance as the amount outstanding decreases although it may, depending on your circumstances, be worth keeping it at the full amount so that there would be a balance left to your nominated recipient if something happened to you.

            Whatever insurances you take out, it is advisable to shop around and not just take the one that the lender can provide although they would require a particular level of cover as different policies have different rules about the circumstances in which they pay out and how long it is before payments start.

            I suspect that in your job you would stay on full pay for a while even if you are off work. You should take this into account when looking at the cover you buy - some schemes will offer different premiums depending on what "waiting period" you want.

              Re: Any experts out there RE critical illness

              Posted by Noddy on 9/6/2019, 23:40:25, in reply to "Any experts out there RE critical illness"

              I think you're a teacher? If so and you're working for the state then you definitely don't have this. If you're in private education then maybe you do.

              I used to sell private healthcare years ago. Teaching was surprisingly high on the list of unhealthy professions, mostly because of people going off with mental health issues.

              Find out what your entitlements are to sick pay from your employer and buy an income protection plan that kicks in as your sick pay reduces. Assuming you do work for the state, the sick pay is generous so that will work in your favour.

                Re: Any experts out there RE critical illness

                Posted by Nearly a Genius on 10/6/2019, 9:49:08, in reply to "Re: Any experts out there RE critical illness"

                As said above, income replacement is a better option than critical illness cover, which might pay out for a shorter time than the illness lasts.

                  Re: Any experts out there RE critical illness

                  Posted by The Outsider on 10/6/2019, 10:13:03, in reply to "Re: Any experts out there RE critical illness"

                  Some critical illness policies pay a lump sum upon diagnosis. Others pay a lump sum plus ongoing regular payments. It all depends on the policy but the more it pays the higher the premiums are likely to be.

                  The thing is that the lender can insist on certain types of cover as a condition of the loan. It then depends on whether you have other options that you can look at that don't insist but allow you to choose what is best for you in your personal circumstances. As has been said, as a teacher, his income is probably guaranteed for some time even if he can't work whereas someone who is self-employed may lose their income immediately.

                    Re: Any experts out there RE critical illness

                    Posted by Nearly a Genius on 10/6/2019, 10:20:47, in reply to "Re: Any experts out there RE critical illness"

                    Thanks. Im just going by Mr. Genius's experience with a critical illness policy from a friendly society. It had the lump some, and monthly payments for two years.

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