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.

@Toooldtoworry so income protection is better?

My DH has critical illness cover and has been diagnosed with cancer which isn't curable. Everything has been pretty shocking, obviously. I am sure terminal cancer is on list of covered illnesses, but I am not really sure I even understand how critical illness cover works.
He is still working, full time. He has had one course of chemo and we have managed to keep it a complete secret (his wishes). At what point would you tell an employer? When would critical illness pay out? Is it when you are physically unable to work anymore?

They both have their place, and everyone's circumstances are different but most people don't have income protection through work and don't have sufficient savings to pay for 7 years of bills, so personally I feel it is higher on the priority list/is a higher need for most clients.

Did you arrange the cover yourself, or did a broker advise you?

I hate to ask, but what cancer is it and what provider is he insured with?

Critical illness claims are not taxable (if the insurer adds interest to the payout that part is).

No one would know he claimed unless he made it public knowledge.

@DrasticAction should add it also pays for any accident or illness that means you can't do your job unless specifically excluded.

Savings.

Critical illness cover.

Don't overcommit yourself financially, e.g. car loans etc.

Don't take recreational drugs, don't drink to excess and maintain functional fitness and movement skills. If you do have an accident or illness your baseline health will determine how quickly you recover.

Actually, see previous posters. Income protection rather than critical illness.

@Toooldtoworry He just had the cover through his company. He probably opted to pay in, I think? I am not sure who it is with. I would need to check.
He has prostate cancer. Thank you for your reply.

@Toooldtoworry

So it sounds like it catches more stuff? I'm very wary of insurance..

Critical illness/life insurance and income protection both have their place depending on your circumstances.

If you have a mortgage and a partner and/or dependents, critical illness and life insurance can cover if either of you die or develop a specific illness. You then pay off the mortgage or a chunk of the mortgage reducing outgoings and making it easier to live on one income.

If you don't want to have to rely on government benefits should you become chronically ill, income protection insurance gives some reassurance that your income would be maintained should you be unable to work for a period of time.

If you get a long period of paid sick leave, you can increase the time before the income protection pays out to reduce the cost. Eg with 5 months full and 5 months half sick pay you could not have it pay out for 10-12 months and keep a 'sick pay' savings fund to cover the gap.

Also look at your pension to see what you would be entitled to through that. For example, mine would provide 3 x my annual salary as a death in service benefit.

All this.

Its a good idea to have some savings and critical illness cover but the reality is that if you become disabled/chronically ill you will end up reliant on the state to some degree unless you’re very wealthy.

at diagnosis

Income protection (own occupation basis) and critical illness cover are the insurance types to look at. I strongly urge you to speak to a financial advisor specialising in this-it’s often free as they are paid commission by the eventual policy provider. FAs will advise on what combo works best for you and find you the best deal.

@notknowledgeable Do you mean you should tell employer at diagnosis - that was months ago in my DH's case, or you should claim at diagnosis?

claim at diagnosis. When you tell your employer is totally up to you, but you should have already claimed your critical illness cover by now - mine took 9 months....

Thank you, @notknowledgeable We will have to get on to this. Sorry to hear you have been unfortunate enough to have to claim. Best wishes to you

Definitely consider critical illness cover. I had been paying mine for 23 1/2 years of a 25 year policy, totally forgot about it as have always been fit and healthy. Suddenly found myself recovering from a massive heart attack for no apparent reason. Remembered I had a folder full of documents and had a quick look, and discovered I was covered. It was for the full amount of my first mortgage 23 1/2 years ago. I only took a few days off work (I’m self employed) and got a payout of £90K. Pretty happy with that and an unexpected bonus from something pretty rubbish!

DH and I have life insurance and critical illness cover on our mortgage (was always under the impression you had to have these with a mortgage!?).
And we both have a private healthcare policy through my work. We wouldn't be without any of the above - the private healthcare in particular is, in my view, priceless. Saved my life.

Thank you so much for your advice everyone, it’s really helpful. I’ll have a proper read of everyone’s posts and make a plan. I don’t have a mortgage yet, but am hoping to buy at some point.

Sending 🌺🌺 and my thoughts to everyone’s on this thread who’s had to use life insurance/income protection - @SomePosters , @eduwot, @Thiswayorthatway , @Itwasfinetillitwasnt, @notknowledgeable

I wish him a full and speedy recovery. Please put in a claim. The worst that can happen is they say no 💐

Yes it does.

Most people are wary about insurance but in 24 years I've only had one client refused a claim and that was because she tried to claim for an illness she had already been diagnosed with but not declared within 3 months of the policy going live.

Or you have insurance.

I have a client claiming until retirement. We're now 10 years in. No state funding required because his Income Protection is paying his bills and mortgage.

Usually a provider will request that claims are made within 6 months of a 'claimable event', but don't let that put you off because I've had clients paid out after 18 months because they forgot they had the plan.

It is no longer a legal requirement

inconvenient protection pay would be beneficial and savings yes. My company pays 1 year full pay and benefits on cancer diagnosis which is amazing but income protection would be best.