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Choosing a life insurance policy/critical illness policy

(6 Posts)
TheNIghtManagersWife Wed 06-Apr-16 22:28:47


I'm a single mum in my early 40s, I work as a self-employed freelancer and don't have much in the way of savings or back up if my health fails.

I would really like to get a life insurance policy started but don't have any idea about these at all.
What I should be looking out for or considering when choosing a policy?

I have the same query about critical illness cover, as I have been lucky to always find work but if I was a month or two without work I would seriously struggle to pay bills. Again I know nothing about these.

Can anyone advise?

DadDadDad Thu 07-Apr-16 17:57:16

Do you mean critical illness - pays out a lump sum if you get diagnosed with something "life-threatening" so your dependants can have something to live off - or income protection - substitutes for income if illness stops you working for a long period? I'm not sure how readily available the latter is if you are self-employed without a regular source of income.

Anyway, for the basics on life insurance policies, I'd highly recommend Money Saving Expert, which explains it and provides links to the way to get cheapest quotes. (Tip: if the cheapest declines, try the next, as they do differ in their acceptance criteria).

TheNIghtManagersWife Thu 07-Apr-16 20:41:10

Thanks for your reply, I think I mean the former - my worry is if I or one of my children become ill I won't be able to work and bring in an income.

I'll take a look at that link - thank you!

HermioneWeasley Sat 09-Apr-16 08:57:48

As a single mum you need both life insurance (pays in the event of your death) and if you don't have savings probably some sort of income protection or critical illness arrangement.

Compare prices through money supermarket and pick any "known" provider

TheNIghtManagersWife Sat 09-Apr-16 16:18:02

I did look up critical illness and if I pay £50/month I'll get a payout of £28,000. This seems really low to me, as I have about 25 working years left.

I'll spend around £30,000 on the policy in that time, so I am wondering if it's worth me just saving the cash instead. £30,000 won't get me very far if I can't work.

I know it is worth it if I get sick before then but I am wondering if I am missing something here. I guess I bought it would pay more for quite a high premium but I accept I am very out of touch with finances.

In terms of savings/assets I'm going through an acrimonious divorce and have no idea what assets I will have once it's resolved.

blueshoes Sat 09-Apr-16 17:26:05

I have never considered critical illness policies to be worth it. Every agent I know has tried to hard sell critical illness policies to me. That must be because they get a whacking big commission on it. As you have worked it, it is a VERY expensive policy.

Always check the fine print as to when they will pay out. For example, would the policy pay out on an early stage diagnosis of cancer or only late stage after the cancer has spread. If it is the latter, consider whether it is really worth it as you won't have the financial buffer to go for early treatment.

Obviously, do get independent financial advice but for me personally, I would try to build up my savings rather than pay towards an extortionately expensive policy that may or may not pay out when I need it.

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