Critical illness cover - do you have it, is it worth it?

[Cll]

My sis is getting a new mortgage - borrowing around £120,000 and they're pressing her to take out ciritcal illness cover (CIC) at a cost of £77 a month. This is a huge amount of money fr her (she's single). On the one hand, being single, it would be great to know that if she did get ill someone would pay her mortgage, but on the other £77 is gym membership, a great holiday a year etc etc. She has life insurance and quite a good deal through work whereby if she;'s ill they pay her for a while, then part pay for a while and then keep her job open

Just wondered what other folks do

I have it but it only costs me £15 per month - albeit taken out 10 years ago when I was 29, single, childless and I don't smoke. How old is your sister? How long does she want to take out a mortgage for? Without being morbid, you need to ask what are the chances, realistically of getting a critical illness before the mortgage is paid off. Plus find out which conditions are excluded. If she has life insurance can she not just add on CIC? (don't know if this is possible, mine is life and CIC combined).

I wouldn't rely on work, most occupations will sign you off after 12 months, I imagine many before that - don't know the law here. If you had cancer, you could well be off long-term.

But £77 sounds a lot to me. Hope some of that helps

Let me see, your sister has no dependents? She isn't at high risk for being ill? Moreover, these policies only cover a fairly limited number of illnesses, from what I recall.

I don't know if this link will work, but here is a Which article saying why Critical Illness Cover isn't usually necessary, and an equally skeptical article at the Motley Fool .

Yes I think it's definitely to be recommended in your sisters case since she is the sole mortgage payer ...unless:

• she has stacks of savings stashed away somewhere
• your parents are wealthy and would be prepared to help her out in the event that she became critically ill

However £77 seems quite high. Would suggests she shops around - she is not obliged to take 'tied' critical illness cover from her mortgage provider. Perhaps she should contact a financial adviser who might be able to suggest other critical illness policies?

definitely don't get it from your mortgage provder. Look elsewhere if she is consdiering getting it

Following on from Zebra's comments - I don't think it's as straight forward as saying is she at high risk of being critically ill. Don't wish to be morbid but seemingly healthy individuals with no known risk factors can keel over at a comparatively young age after brain haemorrhage etc...

What about car accidents etc....

Hopefully your sister will continue to enjoy rude health - but who knows what is around the corner.

I'm at very low risk of being burgled - but I still have house insurance!

www.moneynet.co.uk have a good value one I seem to remember, not nearly that pricey.

Critical Illness Cover doesn't cover car accidents; it doesn't cover accidents. And car accidents are the leading cause of death for people under 35, so arguably a good one to insure against. CIC only covers a specified list of medical conditions. From the Motley Fool Article:

"About 90% of all critical illness claims are for cancer, coronary artery bypass surgery, heart attack, kidney failure, organ transplants and stroke and these core illnesses are usually on the list. If you want others to be added, you'll pay more."

I guess brain hemorrage is on the list, if that's the same as a stroke. I note broken bones (could Cll's sister work if she broke her back or legs?) aren't on the list. Probably because that comes under "accident" again.

We have personal accident insurance for DH, btw.

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Twiglett,

I'm not sure that the 'no dependents' thing is relevent, since maybe I'm wrong but I thought critical illness cover ensured that your mortgage gets paid whilst you are ill and unable to work?

So whilst Cll's sister has no dependents, it would probably still be an issue to her if she had no income for a while due to illness - since she would have no means of paying her mortgage and would risk repossession of her house.

I could be wrong of course....(frequently am)

Have just read Zebra's link and realised that I have been confusing critical illness cover with income protection...(what a thickie!!)

Knowing what I know now, I would say critical illness cover is a waste of time, but income protection isn't!

Well, I'm glad I've learnt something from Mumsnet today

Does income protection insurance only cover certain reasons for loss of income, too? Honest question, you tell me HMC.

I think that's why we didn't realistically consider IPI, but we also had the luxury (only 5 years ago!) of being able to get a mortgage that could be paid out of either of our salaries.

the interesting thing about critical illness is that it pays out immediately if you have heartattack, cancer, stroke and a few others. you don't need to die to collect it like life insurance, you don't need to prove loss of earnings etc. I would think that the principal earner in a family should have it (both me and my dh do, but only since we had children) but I wouldn't bother if I was single and had decent employers who would pay me salary while on sick leave.

Mine comes with my life insurance.
And yeh I think it is worth it.

It is worth looking VERY carefully at how Critical Illness Cover will be paid. Dh recently had to fill in a form for someone who was trying to claim. This chap had had a heart attack. Bu tthe insurance company were trying to get out of paying. A doc will diagnose a heart attack on any 2 of (a) clinical syptoms (basically crushing chest pain), (b) changes in the ECG and (c) a blood test. This man could not claim for his heart attack because his insurance company wanted ALL 3!! More than any top cardiologist would look for!

We looked into it as dh is self employed but decided against it, mainly for the sort of reasons I gave. It can actually be pretty hard to claim sometimes. £77 a month sounds like a lot to me.

Thanks for all that

for info she's 41 and ttc on her own (starting IVF on a remortgage, with donor sperm on Friday!!)- Our mum died of breast cancer aged 50 so we're aware that perfectly healthy, non smoking, non drinking, never been on the pill, had kids early, kind of people can get crap diseases.

I've said she should prob get CIC until such time as she has a partner who could help her out if things went belly up. She told me to stop living in cuckoo land.

Anyway, will send her the links (she'd die if she knew I'd told you her life story, but you don't know her anyway, do you) and maybe get a couple of different quotes. Guy selling her the remortgage and CIC is financial advisor and keeps saying Scots Prov are the only ones who pay out for this that and the other (inlcudes £20,000 for any dependents she ever has and premium stays the same throughout mortgage term) but how do we know they aren't just the ones who pay the most commission? MAybe I should ask him..