Critical illness cover

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Has anyone got critical illness cover or income protection? Not sure what I need. I’ve had critical illness cover and life insurance but both policies are about to expire.

I’m 54 and live alone (post divorce). Kids are over 18. I work in the NHS and this the gives death in service payment which would easily pay off my mortgage.

Worried about things if I got an illness…

If you have critical illness cover, or income protection, who is it with?

I worked in the nhs (also single parent) when I became unable to work due to routine surgery going wrong. Critical illness cover was not relevant because you have to have an illness that falls on the list. I had a delayed income protection that started at 6 months for 1 year which is when sick pay reduced. It was the thing that kept the roof over mine and dc heads till benefits and ill health pension were sorted (took 7 months for pension, pip and esa which you cant apply for straight away).

If you no longer have dependants and you have a death in service benefit, you don't need life insurance.

Have you had a look at what income protection and critical illness cover? As an NHS worker you probably get full sick pay for a long period, so you should take that into account in your financial planning.
Do you also have 3 months of expenses in cash to tide you over if you can't work?

Critical illness covers a very specific list of illnesses - so you could have plenty things that wouldn’t be covered. It’s also fairly expensive. If your mortgage is small you could maybe cover that amount?

Income Protection is designed to pay a monthly income if you are unable to work as a result of illness or accident. Therefore covers a wide range of possibilities. Is less expensive. If you would be paid by NHS for X number of weeks/months off sick then you would set the deferred period of Income Protection to start at the end of the NHS period. It will only pay a max of around 65% of current earnings but the payments are tax free. You would usually want a plan on “own occupation” basis.

Legal & General offer both plans if you want to do more research.

Yes, I’d get 6 months full pay and 6 months half pay with the NHS. Probably could do with topping up the emergency fund so will do that.

My cousin who was self employed had critical illness cover. When he died it paid off the mortgage and there was money to see the family through the first awful months of bereavement. I think for anyone self employed it is something to consider.

My story is similar to @Mysterythatissolved . I set up Income Protection with a 12 month delay, which brings the price down a lot. Sadly I had to claim on it, and it has been paying out £600 a month for the past few years. It doesn’t match my old income but it meant I didn’t have to cut back anything like I would have done otherwise while I was sorting out my medical retirement.

It’s the best insurance I’ve ever bought. If I’d bought critical illness cover instead I wouldn’t have been covered.

Who is it with?

Legal and General. My experience with them has been good.

I took out income protection over 20 years ago when I became a single parent. It was expensive. I work in the NHS and get one month full pay and one month half pay.

it was peace of mind at the time. Had I been off sick I would have needed it to pay the mortgage.

i’m 57 now and thinking of cancelling it.

We have income protection and life insurance. I'm being made redundant and whilst I'm hoping to get a job quickly, it's helped knowing my income protection will pay me £1200 a month for 12 months if I can't. That covers the mortgage

I had critical illness with Aviva, when I was diagnosed with cancer they paid out with no fuss, in fact they were lovely to deal with. It paid off my mortgage which was still quite substantial and we had quite a bit left over.
But reading some of these replies, income protection might be a better bet.

I took out income protection when I first bought a house. It costs £58 a month and pays out £2000 a month. I get 3 months full pay from work and SSP after that. The income protection pays out for up to 2 years.

I’m thinking of cancelling and just adding the £58 to savings every month instead.

Do you not get 6 months full 6 months half pay? Most NHS contracts build up to this over 6 years.

This is a very important point.

I had critical illness cover that refused to pay out because my condition was not on their list. Despite my consultant telling me I would be unable to work and having been ill and in pain throughout the years since I stopped work.

Not on their list? They won't pay out.

Yes, that’s who I’m with now. I need to renew my policy.

No. Just the two months. I’ve been there many years.

You should be able to have IP with a six month delay.

Remember as well that medical retirement in the NHS exists and as you're 54 you might only need the lower level of I'll health retirement which has a lower threshold for qualification.

So there are two different sorts of medical retirement in the NHS.

The first is the highest level which basically uplifts your pension to what it would have been. If you'd worked all the way through to pension range. That is quite difficult to achieve, because it requires you to never be able to work again in any role.

The second essentially brings forward the pension you've currently earned and doesn't actuarially reduce it for taking it early. So for example, say you've been in the NHS since you were 21 or whatever you'll already have a good number of years accrued, and that might be enough to manage on. For that you only have to show that you won't be able to do do the job you're doing now again.

This means you don't then necessarily need to achieve the first type, where it uplifts that pension to what it would have been. That then means that you it's a lot easier to get approved for that ill health pension if it were required.

So then you might not need to pay for income protection insurance that pays out forever. Or you might still think the risk of not getting ill health retirement is sufficient to want that long term insurance.

Are you not on agenda for change terms and conditions? I thought everyone employed directly by the NHS was either on AFC, Medical and Dental, or Very Senior Managers Ts and Cs. I guess if you work at a doctors surgery you might not be, because they're in the weird hinterland where they're contracted to deliver services for the NHS but not under NHS Ts and Cs. Or are you in a role that's been subcontracted out to a private provider?

I had my critical illness cover with Aviva and highly recommend them. They paid out in full straight away when I suddenly and unexpectedly became disabled and the money has been a godsend.

It’s worth bearing in mind that you don’t have to replace your whole salary for it to be worth having. IP is much cheaper if you shave off some corners - delay the start, pay out less than your salary, pay out until you’re 60 rather than retirement age etc. When you’re off work long term and sick then any extra payment is a huge help. Benefits are absolutely pitiful and it takes ages to go through the ill health retirement process.