Critical Illness Cover or Income Protection? Or something else?

[Iwontletyoudown]

I am just about to take out a mortgage in my sole name having recently separated from my husband. Never had any kind of personal insurance before and feeling a bit lost. I work and am financially responsible for my 3 children without any financial support from their father. I want to safeguard against being unable to work due to illness. In case of my death I think their father would step up to the plate. Any advice as to what might be my best type of insurance policy gratefully received. TIA.

Firstly you need to know how long you're paid if off work sick, then how much you would need paying each month, and for how long.

Mortgage protection insurance is basically PPI for mortgages - if you are signed off sick it'll pay the mortgage until you return, up to a maximum period of time (often 12/24 months). Will also cover redundancy usually.

Income replacement insurance is more complex - you choose how much you want to get each month if you're unable to work, and how long you want it to pay out for. You can add a deferment period onto it eg if you're paid through work for 3 months then you can have a policy that only starts paying after 3 months which will lower your premiums.

I'd also seriously consider life insurance - even if it's just enough to repay the mortgage and cover funeral expenses, it would mean the children would inherit your property, and if their dad isn't currently offering any financial support it would mean they definitely have something. Life insurance isn't hugely expensive, particularly compared to income protection options.

Thanks Rockchick that's helpful. I'm hesitating over critical illness cover because even the more expensive policies don't cover everything. I do need to check my employment terms and conditions but I think it is 3 months sick on full pay and a further 3 on half pay. I have no capital to live on beyond that. Would income protection insurance be a more guaranteed payout?