To ask how to prepare for risk of future illness/accidents?

[Acapulco12]

Just posting for some advice on how to prepare for unexpected life events e.g. serious illness or accidents. (This is related to advice I saw on a thread about the King’s cancer diagnosis, where a poster suggested taking out life and critical illness insurance, to prepare for illness and accidents etc.)

For context, I’m early thirties, work full-time and don’t have kids yet. I am lucky to have a very good sickness pay policy at my workplace - 5 months’ full sickness pay followed by 5 months’ half-pay.

Obviously I don’t know if I’m going to spend my whole career working for my current employers, and my next workplace may have less generous benefits.

Is there anything I can do to prepare and protect myself money-wise if I get a serious illness or have an accident? I don’t have life insurance, critical illness cover or a private health policy. Is this something I should look into getting? I am clueless about this but want to learn about it, so I can prepare for stuff that might come up in the future.

Thanks very much all.

Just bumping in case anyone can advise please.

Make sure you have at least 3 months wages saved, and yes take out critical illness. If you don't have dependents or a mortgage then life insurance is less important. Private healthcare can be useful so worth looking into if you can afford it.

One of the best preparations is to have savings or investments you can fall back on in hard times.

The other good preparation is to keep fit and healthy, hopefully avoiding some bad stuff.

You said no kids yet - what about a partner? Do you have a mortgage?

To decide what you need, you need to think about what various scenarios would mean for you. Critical illness cover is sensible in most cases. Life insurance is to help your dependents manage without your income, so without kids, you may not need it. However, if you have a partner with whom you share a mortgage and who would struggle to afford the payments on their own, it could be worthwhile for that reason. There's more than one kind of life insurance - you can get policies that pay out a set amount, or (cheaper) policies where the amount decreases over time as your mortgage balance does.

Private health insurance is useful to have for peace of mind but may be an unnecessary expense if you're young and healthy.

The cost of all these things will increase as you age. For the insurance policies, it will be cheaper to take them out now than when you're older, with more risks and potentially pre-existing conditions to declare.

I dont have savings, but i have a mortgage and kids - so have life insurance and critical illness cover.

With these covers, keep in mind that they are more expensive the older you are x

Things to do now - Speak up about disability injustices, stop the government making it harder for the sick and disabled to survive. Read up on the reality for ordinary sick and disabled people and try to get involved in changing the system so that should you ever be misfortunate enough to need to rely on it, it’s fit for purpose.

Honestly so few people believe they will
end up seriously sick and disabled and at the moment unless you’re a King with bazzillions in the bank you’ll be stuck in a hell of bureaucracy, assessments, waiting lists and wondering if or when someone’s going to help (hint : they won’t you’re on your own)

I know people will be here with practical help but the reality is as a country we no longer care for or support sick and disabled in the way most of them need. Partners need to work, kids still need fed and schooled and the mumsnet favourite, no one owes you childcare becomes a reality even more than ever. Unless you are properly wealthy then pay for others to do it all for you.

A lot of mortgage brokers also offer advice on insurance, so it might be worth speaking to them.

I have critical illness with work as well as a separate policy to pay our 50% of my salary. I also have a policy with work that pays 80% for 2 years. They have a delayed pay out so I also have savings to cover that period.

Critical illness cover. I’m married with 2DC and it paid off the mortgage after my cancer diagnosis.

set up POA - you don't know when you will need it

POA form can be downloaded from gov.co.uk. It does not have to be complicated, and it costs around £160. It takes about 6-9 months, so don't wait until you need it. Anyway, by the time you need it you might not be capable of setting it up. Just little things like can your relative access your bank account to pay your gas bill for you when you are too ill to do it yourself, that sort of thing. It makes life so much easier if you are incapacitated

https://www.gov.uk/government/publications/make-a-lasting-power-of-attorney

You can get Critical Illness cover. I'm going to get some for me and DH soon, just in case. We could manage on one wage, but proper financial support would be very nice.

This is my bread and butter, I am a protection adviser in a mortgage brokerage. The average claim period for income protection (which pays up to 65% of your gross earnings tax free if unable to work due to accident or illness) is 83 months. So yes, you have better than average sick pay but it wouldn't touch the sides in those circumstances.

Critical illness is good BUT is limited to a list of covered illnesses in the policy documents including at what stage and grading it pays out. Both plans have their place.

Statistically you are 3 x more likely to claim on Income Protection than a critical illness plan.

If you're looking for something to pay the monthly bills it's income protection you need. Not critical illness.

An insurance policy is what you need if your anxious about this.

If you pay into a work pension, this sometimes provides free life insurance too as part of your employee benefits

The payout on this could be taxable at 55% dependent on the value, plus you have to still be contributing at the time of death.

To prepare

An up to date will
Possibly marriage or civil partnership
Paperwork / life admin in one place
POA
Savings

I get life, illness, critical illness and accidents insurance through my job as part of my benefits - life would pay 12x my salary, critical would pay 450k and health pays 75% of income after 6 months (I get full pay sick pay for first 6 months) and then if medically retired I get the 75% until I hit retirement age. I also have life, critical and accident insurance for my husband through work (salary sacrifice but much cheaper than elsewhere) and he has taken out health and redundancy insurance separately.

This happened to me, one day a working single parent, the next disabled and unable to work. What helped was income protection (I had it set to start 6 months after I became ill as I got full pay during that time, so lowers premium). Critical illness cover was useless because my illness was not on the list. I ended up being retired on ill Health grounds so claimed my pension at 36, applying for Pip and esa.
It all takes time to get the benefits through (6-9 months for me) so the things that helped me were my savings and income protection plus having good sickness policy at work.
Unfortunately now I have no cover because no-one will insure me but I have enough to get by (just).
Also being in a union, they gave me advice (on not resigning and allowing work to dismiss me on ill health grounds to help claim benefits and pension) and gave me some money to assist with bills and buying a wheelchair). I'd payed in for years, never needed them but they were there when I needed them.

This is such a good point , the ordinary person pays not a bit of attention to how sick and disabled people are treated by the state . We need to do better as one day that could be us .

I would look at an income protection policy rather than critical illness because if you don't get one of the illnesses that they specify then you will not be eligible for a payout.

I've never really seen the point of the critical illness policy because what happens if you don't get one of the specified illnesses?

Income protection is also known as permanent health insurance.

If you don't have any dependants then I wouldn't bother with life insurance. Although, of course the younger you are when you take it out, the cheaper it will be and you won't have as many pre-existing conditions to declare.

You are very lucky most people don't get anything like that.

We only get 5 days paid sick leave a year and two times salary life insurance.

After my recent experience I would say take pictures with your loved ones, even if you hate having your picture taken

Make sure someone, somewhere can get into you phone and laptop

Make any intentions re children and assets known

Never rush out the door without saying goodbye, you never know when it’s the last time

I don't see the point in having in critical illness cover as it is so restrictive.

Income protection is so much better.

@Thiswayorthatway

🌻💐. Can you say which provider please