Critical illness cover

[Mirren22]

I took this out when I bought my first flat 5 years ago. I'm single, healthy for now, aged 38, no kids. The mortgage advisor sold it to me as part of the package, it's £110 per month. It's 25% of my monthly mortgage payment and I'm really questioning now if I should continue the payment. The obvious question is what does it cover and in what circumstances would it pay out and at the back of my mind, I have the feeling that generally, insurers will avoid / limit what they are due to payout. I'm wondering if I'm throwing money away here... I suppose I'm looking to hear if others have critical illness cover, is it something you deem very important, should I just continue to pay for it, or is it generally a bit of a waste in that it is sold as a golden ticket to pay all bills in the event of critical illness?

Mmmm as someone who got Stage 4 cancer at 39 and was told it wouldn't pay out, I'd double check what it covers but if it looks good - keep it as it would pay out and be a huge help.

I was devastated as I thought mine covered cancer but it didn't as my sister had previously had cancer, which I disclosed, but our FA didn't explain that this then made it exempt.

I'd thought our payment was higher because of it, so never ever shopped around thinking I was safe.

I personally think it’s absolutely pointless. It’s insanely expensive with lots of exclusions.

Without knowing more about the policy cover and payout, I can’t tell you whether it’s good value compared with similar products. Try an online competitor.

if the mortgage advisor sold it to you and they are a tied agent, that’s a bad sign.

I have serious illness cover (covers lots more than critical) and it’s half that amount monthly. Mines from vitality. Maybe check some alternate quotes?

Seems prohibitively exoensive.

But I have 2 friends and a colleague who had it and it’s paid off their mortgages. 2 had cancer and one had a heart attack (all in their 40s).

£110 a month seems a lot?!

Mines £16 with legal and general. My life insurance is another £16 37 with two kids

The question here for you is "what do you hope that "payout" would cover for you in those circumstances?" You don't need to answer on here but more to think about. Worth re-reading the policy to refresh your knowledge of cover. And looking at family history. You are currently paying £1320 per annum. If you get ill (critically/terminally ill) and die - what happens to your mortgage debt/assets? No dependents (you said no DC)? So is it necessary in those circumstances. Are you hoping to have the lump sum to help you out if you survive eg modify a property, move somewhere more suitable? What would work payout in those circumstances eg enhanced retirement, long term sick etc. Your £1320 pa would slowly build up to a small pot but relatively not a lot.

I've been thinking about this for me for Life insurance. I am late 50's - no mortgage, 1 adult DC, some free assets and a house. So I am not sure for me life insurance is worth it. I am no longer covered through work/pension.

As someone who claimed on their policy within two years of taking it out, and working in the industry, I would always recommend having a thorough review of your insurance policies from time to time, to check they are still relevant and the best cover you can get for your budget.

Firstly, refer to your policy documents or contact your provider for details of what is and isn't covered, you should have a clear knowledge of this going forward, to enable you to compare your options like for like.

Secondly, get a good broker, have an appointment and talk it all through. It does sound like you are paying a lot but none of us know your circumstances so its impossible to judge based on the information you have given.

Not just you OP but please everyone do this- i saw a gofundme just this week for a funeral of a dad who died suddenly in his 30's leaving a wife and two small children with no savings and a mortgage that they now cant pay. Please protect your family to the best of your ability its life changing at the worst possible times.

That seems expensive. It depends how much you need. Our mortgage is huge and I took a view that I couldn’t afford cover that would pay off the mortgage. So I have cover that would pay out £50k which would be enough to get us through 18 months or so and then we have to make different decisions. But we have good savings, second house, decent pension pot already - and my job offers some form of income protection. So I decided that was enough. Pay about £20 a month I think with Aviva.

I'd be very wary of cancelling this OP as if you were to try to get the same cover again it will be more expensive as you will be older than you were when you took it out. Critical illness cover will also cover any future dependents in some cases. It does seem expensive though so I would imagine it is a good policy

Have you looked at Income Protection insurance? That pays out for a wider range of illnesses than Critical Illness and you can choose the level of cover that you would need for your mortgage. You can bring the cost down further if you delay the start of a claim, eg if you get good sickness cover from work.

Similar to @oustedbymymate, I’m with Legal and general. A lot less expensive. Currently paying under £16 for life insurance with critical illness cover. I took it out when I was around 30. No medical history. I assume your age might make it more expensive, but surely not £110?!!!

we have terminal illness cover; my partner is terminally ill so we put in a claim. They declined it as (they argue) he’s not in his last year of life. We asked for the paperwork which includes a supportive statement from his consultant (ie stating they believe he is in last year of life). But the insurer’s consultant (who has never met DP) disagreed so - no pay out. It has been hugely upsetting and I wish we hadn’t paid the premiums for all these years.

How much critical illness cover are you getting for £16 though? Honestly unless you know level of cover (including any opted-in addons, fracture cover, dependents cover, and clients exact circumstances at time (smoking, drinking habits, age, weight, medical history, family medical history) and the term of the cover (cover stopping at 45 is going to be a lot cheaper than cover stopping at 65) it is really potentially dangerous to compare policies so simplistically like this.

As I said earlier- please to all reading this DO NOT just stop a policy without either taking advice or researching thoroughly yourself.

@Outnumbered99 I am not an expert at all. I hope OP does speak to an expert and shop around. All I can say is that I was 30 when I got my cover. No med history. Non smoker. Clean bill of health at the time. Covering 250k till retirement age.
The point I was really making was that £110 sounds like a lot! But I only have my own experience to compare to. A broker would be a good idea.

You have an incredible policy! I don't think I've ever (20 plus years in the industry) seen such a lot of cover for so little that's amazing. Dont you dare cancel it ever MissGemini!!

Aha! I don’t plan to. Seems like I got it very cheap (pre Covid times). I recently spoke to a friend whose husband was paying 4x my premium. I just assumed he had medical history that made it more expensive.

We couldn't afford it when we took our mortgage out fifteen years ago and reasoned we were young. We recently looked into it was quoted £75 a month but income protection was £30 a month and covered more so we went with that.

I have critical illness cover. I am healthy, in my 40’s and it costs £42 a month. £110 is insane! My husband has a policy with the same company and a family history of bowel cancer and pays just over £10 a month more,

My policy paid out a lump sum when my daughter was diagnosed with brain cancer and had excellent cover. I would have yours reviewed asap!

Hi - I know this is an old thread, but I hope you see this. Based on what limited info you have said here, it looks as though your FA has failed to disclose key info to you. It would be worth making a complaint to them in the first instance, the relevant ombudsman second, and getting independent legal advice. You would usually have six years to bring a claim of this nature, but it's abolsutely worth checking out if you have a path to a claim here. Sorry about your diagnosis, hope things have improved for you.