Critical Illness/Sickness Cover

[Octopus37]

Have been self-employed for a couple of years, work as a Market Researcher part-time, earn reasonable money. We have life insurance with our mortgage. Was thinking that maybe I could do with setting up a critical illlness policy or something as well, as it does generally worry me that if I suddenly got too ill to work I would have nothing coming in, also worry about this being the case if something happened to one of my kids. Any recommendations would be great.

We did this for a while but the actual policies are not very generous unless you pay out a lot- like lots of insurance.

The exclusions in the policies cover almost everything and the one we used would have covered me for the extremes of not being able to cook, dress, mobility , look after myself in any way.....

At the time ( a good few years back) we paid something like £10 a month with Scottish Widows and this gave something like £250 a month cover, which would have been enough to keep us in the black rather than the red, but it was potentially more useful as a means to employ a cleaner or after school child minder etc.

We have income protection, which insures a % of DH's income, enough to cover the mortgage and main bills, basically. It is expensive in terms of other insurance, but it's a really good policy - for eg if he becomes too ill to do his own current job, but is well enough to do another, less well paid job, the insurance will pay out the difference.

Might be worth looking at?

But Lonny if he was ill, would he not qualify for full sick pay for 6 months through his employer?
And is one other option to save what you pay on insurance for such an eventuality? Surely the insurance won't pay out indefinitely? There must be a cut off point....

Nope, he would get 2 weeks full pay then go onto statutory sick pay. ( His works sick pay policy is particularly shit. Well, to be fair they've paid full pay to people who have cancer etc but that's been at their discretion, which I'm not prepared to rely on). It's not indefinite iirc but it's for a long enough period that the mortgage would be covered, and I would have long enough to scale up what I do to cover the gaps.

And the buffer between his current role and any future role he'd have to take due to ill health is very important to me - he is currently very senior so that takes a massive amount of pressure off him should he need to downsize that.

Honestly, I'm very suspicious of insurance for this kind of thing but I think this type of product is worth a look. I'll stop going on now though because I don't want people to think I'm on commission!

Surprised that someone so senior is receiving so little when it comes to sickness pay- most companies pay out for 6 months then 50% after that. The insurance would cover the mortgage term? That sounds hugely generous- say 20 years?

Yep. DH's doesn't.

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