NLIC.org

Mildred Said:

Need to get accident and critical illness cover for a mortgage in UK..?

We Answered:

Different companies will over diifferent types of cover. It should not be to difficult to find somewhere which gives life insurance and critical illness cover. Have a look at www.moneysupermarket.com under the life insurance section.

In fact the standard type of life and critical illness cover is to pay the sum assured (set to be the size of your mortgage) on death or diagnosis of a particular illness.. The kind of cover you mention above seems to be more of an income protection policy rather than a life/critical illness cover that you would need for a mortgage.

if you are looking for income protection, you will also find information on the attached website. This type of insurance is unlikey to pay for longer than 12 months. However, any illness that meant you were unable to work for periods of more than 12 months is likely to be covered under a life and critical illness policy.

You may want to get in touch with a Financial advisor if you can't find what you need from the website mentioned.

Sheila Said:

should i cancel my life/critical illness insurance?

We Answered:

Ok this is a complicated situation ~ lets go through it.

You have whats know as an "assurance" policy not an "insurance policy. The difference is that an assurance policy is guaranteed to pay out [at some time] and an insurance policy will only pay out if you have,say, an accident to something in the home ~ which is why its always very sensible to have an insurance policy to cover your home and contents.

Now with your policy, they have refused to pay out on the critical illness side because of an error that was made in completing the original form, they would still pay out on the life side, subject to how the death occurred.

As you have no mortgage, and no dependants to leave any lump sum to ~ you may wish to consider cancelling it and putting that £40 a month into a savings plan ~ but its not quite as easy as that for anyone here to advise you on, as you should seek advice from a totally independent financial adviser who is licensed through the FSA, they are the only people who can give you the right info. having gone through all your details.

Hope this helps a little

Toni Said:

How can life insurance with critical illness be be worthwhile? They can't pay out often, surely?

We Answered:

I'd challenge your statistics and analysis on two grounds:

1: If a hundred 20-year-olds takes out such policies, at £30 a month, then I'd be surprised if 14 of them had major problems before they were 40.

Obviously, if a hundred 55-year-olds took out such policies, the premiums would be MUCH higher.


2: The way insurance companies REALLY make their money ISN'T on the difference between the payouts and the premiums... it's on the INVESTMENT INCOME they get for having the premiums all those years BEFORE they pay out.

Have you taken into account the value of £30 a month for 10 years, and what that would have made ploughed into, say, the stock exchange?


As a customer, will it be worthwhile?

Depends - if you have such an accident, or get such a disease, it can make all the difference in the world.