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Thread: ‘Critical illness’ cover tagged onto Mortgage life insurance - worth it or not?

  1. #1

    Question ‘Critical illness’ cover tagged onto Mortgage life insurance - worth it or not?

    Would appreciate opinions and advice from you wise folk. :)

    Thanks

  2. #2
    Master MakeColdplayHistory's Avatar
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    Quote Originally Posted by The Hack View Post
    Would appreciate opinions and advice from you wise folk. :)
    Thanks
    Two different questions:
    • Is Critical Illness cover a good idea - for me and my wife in our circumstances, it is but I cannot say whether it is or isn't for you.
    • Is the CI cover tacked onto your mortgage life insurance the best cover for you? You may be able to get more/better cover for your £ elsewhere.

  3. #3
    Friend of mine going through this.....

    Its all down to your aspect of risk as is any assurance/insurance

    You will possibly get a better deal buying independently - but it's a case of getting some quotes

    - - - Updated - - -

    Friend of mine going through this.....

    Its all down to your aspect of risk as is any assurance/insurance

    You will possibly get a better deal buying independently - but it's a case of getting some quotes

    - - - Updated - - -

    Friend of mine going through this.....

    Its all down to your aspect of risk as is any assurance/insurance

    You will possibly get a better deal buying independently - but it's a case of getting some quotes

  4. #4
    Friend of mine going through this.....

    Its all down to your aspect of risk as is any assurance/insurance

    You will possibly get a better deal buying independently - but it's a case of getting some quotes

  5. #5
    Grand Master
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    C'mon, 4 friends?!

  6. #6
    Master
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    The one bolted on to a mortgage is unlikely to be the best policy or the best cover, find an IFA.

  7. #7
    Master
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    Check T&C of the cover - it may only pay up to a year and not kick for three months etc.

    Check all your other policies - you may have enough to cover the mortgage in event of CI.

    Check with your employer - you may have long term Illness cover which could negate the need for CI cover as you could have income to cover a mortgage anyway.

    Add up how much in premiums you will pay over the mortgage lifetime and compare to what it will pay out.

    Buy a separate product if you really want CI cover.

  8. #8
    Quote Originally Posted by MartynJC (UK) View Post
    Check T&C of the cover - it may only pay up to a year and not kick for three months etc.

    Check all your other policies - you may have enough to cover the mortgage in event of CI.

    Check with your employer - you may have long term Illness cover which could negate the need for CI cover as you could have income to cover a mortgage anyway.

    Add up how much in premiums you will pay over the mortgage lifetime and compare to what it will pay out.

    Buy a separate product if you really want CI cover.
    What you are referring to is Income Protection which pays out monthly if you are unable to work due to illness, generally set to pay out until your retirement age or return to work.

    Critical Illness Cover pays out a lump sum if you are diagnosed with Cancer, Heart disease, and various other illness dependant on the T&C, some also cover loss of limps, eyes etc

    CIC is not cheap cover compared to straight life cover, you're best bet is to contact an IFA and obtain quotes. At the end of the day it depends upon your attitude to insurance and protection, also affordability

    PM me your details if you want

  9. #9
    Master raptor's Avatar
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    It pays a lumb sum in case you are diagnosed with a list of diseases
    Yes it worth it

  10. #10
    This product came out about 26 years ago just as I was getting a mortgage. It was very cheap to add on and well worth it

    However in the years that have elapsed (a) premiums have gone up massively (sometimes 3-4 times equivalent life cover - they’ve worked out that with modern medicine you are more likely to be ill and survive then die) and (b) the small print of what is a ‘critical illness’ has been ramped up so there are many exclusions. So a bit of ‘minor’ cancer won’t trigger payment.

    Talk to an IFA .....


    Sent from my iPhone using TZ-UK mobile app

  11. #11
    Personally I don’t see it’s worth. It’s a bonus if you do become ill but (as mentioned) what’s more of a necessity is income protection cover.

    Not sure why everyone seems to need an ifa either - not difficult to do own research, use comparethemarket.com or similar.

  12. #12
    Master
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    Quote Originally Posted by raptor View Post
    It pays a lumb sum in case you are diagnosed with a list of diseases
    Yes it worth it
    Personally ive never had it but a good friends did, his was diagnosed with cancer last year (she is in remission) the company paid around £40K and they paid of their mortgage

    - - - Updated - - -

    Quote Originally Posted by raptor View Post
    It pays a lumb sum in case you are diagnosed with a list of diseases
    Yes it worth it
    Personally ive never had it but a good friends did, his was diagnosed with cancer last year (she is in remission) the company paid around £40K and they paid of their mortgage

  13. #13
    It’s a “Hell yes!” From Me and I’ll give my reason.

    Bought a house with my wife 20 years ago, £86k mortgage that had insurance attached “Life insurance with critical illness cover”, now I’m no expert so just thought this was a policy that meant if we were ill or dead the insurance would pay the mortgage.

    Paid our mortgage off early so thought we no longer needed the cover £23 odd pounds a month, wife phones to cancel it, long story short got in a queue so didn’t. We carried on paying it for two more years, then my wife thought I really need to cancel this, while on hold on the phone she noticed the policy had critical illness cover and as my wife had been treated for breast cancer, instead of cancelling she asked if this was covered, they said subject to a letter from doctor yes.

    I couldn’t get my head around it, I said because the mortgage was paid off they wouldn’t pay out, they gave my wife a form to fill in and I said don’t waste your time.

    I was soooo wrong. She filled the form in and sent it off, a few weeks later I sarcastically said “any news?” She rang them and they said yes a cheque was in the post!

    The payment was calculated at if we claimed year 1 we got 100% then it decreased till 0% at the end of the 20 year mortgage, I was eating humble pie but my wife hadn’t asked how much the cheque was for.......

    We got the cheque £65k! I was chuffed but then my wife started looking at details, turned out that was wrong because the cancer was 2 years earlier that was the date they should have used so they sent another cheque, then it turned out you can only claim once so we had been been paying for two years that we couldn’t have claimed for, another cheque in the post.

    Don’t get me wrong, my wife had breast cancer and it was six months of worry and for her discomfort but we got a total of £69k so now we refer to her right boob as the tit kept on giving!

  14. #14
    Master
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    Like all insurances really you hope it will be a waste of money. If you become critically ill though it’s a great comfort to know you have cover. I’ve had a few clients over the years that have had their mortgages paid off and it’s been a big weight off their shoulders not having to worry about money whilst they are ill.

    The cost has risen quite a bit in the last 25 years as claims have been higher than expected so it can be quite expensive. Attaching it to a decreasing term policy will reduce the cost (and cover of course but it’s design is to clear the mortgage which will be decreasing at the same time), or going for a lower amount - some cover is better than mine. Quite often if someone has say a 150k mortgage they might have 150k life cover and say 50k or 75k CI to make it affordable. See an IFA or mortgage broker as they will be cheaper than a bank as they can source the whole market.

  15. #15
    Craftsman
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    We took it out on a mortgage @ 20 years ago. 12 months after , I was diagnosed with cancer. The policy paid out to cover the outstanding among on the mortgage. So I would say it is worth it.

  16. #16

    Thanks for all the advice and input guys - much appreciated! Even through an IFA, these days critical illness cover is pretty expensive. £70 per month for 17 yrs, gets you only £30k cover. :(

  17. #17
    Quote Originally Posted by The Hack View Post
    Thanks for all the advice and input guys - much appreciated! Even through an IFA, these days critical illness cover is pretty expensive. £70 per month for 17 yrs, gets you only £30k cover. :(
    Is that level cover or decreasing cover?

  18. #18
    That’s level cover.

    Quote Originally Posted by nick67 View Post
    Is that level cover or decreasing cover?

  19. #19
    Quote Originally Posted by The Hack View Post
    That’s level cover.
    Assuming you have a repayment mortgage, you would need Decreasing Term cover.

    Some of my clients opt for a combination as they take the view they would like to clear the mortgage, but also have a fixed lump sum that could be used in the event that they need to make alterations to the property, in the event of wheelchair access etc or move.

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