Other Any advice on Whole of Life Serious Illness Policy?

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Dace69

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I have a Whole of Life Serious Illness Policy which I've had for the past 16 years. It was an Encashment Value of approx. 3K. My Insurance Advisor has advised that I'd be better to take out a new policy as more illnesses would be covered and it would also offer better cover for my children in the event of them having a serious illness. A newer policy I'm told would also offer 'part payment' for some illnesses.

I have hospital cover on my existing policy, also. So if I should be in hospital for more than 4 nights I get a payment per night. Policy is costing me circa €900 p.a. for €80K cover & I'm told the next review will be at 20 years, at which time it may become very expensive.

I am tempted to cash the policy in and take the value now but I would like to have some cover so I'd end up taking out a new policy for a lesser value, as I'm now older hence more expensive. I am also considering leaving the policy as is until the next review but at that stage I will be 48 so I presume cover would be more expensive then.

Any advise greatly appreciated. Are the new policies better? Will Whole of Life become unaffordable?
 
Ultimately reviewable whole of life policies become very expensive. Many insurers no longer offer reviewable whole of life policies due mainly to the level of complaints they were receiving at time of review from customers.

There is guaranteed whole of life policies that cover death only but not serious illness to the best of my knowledge.

If you take out a term policy for specified illness you will indeed get arguably a better policy with more things covered but there will be an end date and an age after which (currently) life offices will no longer cover you for specified illness cover.

Your main question to answer is do I want my specified illness cover for the rest of my life and am I willing to pay a lot for it. There are cheaper alternatives (in the long run) with arguably better cover now but they wont be whole of life policies for specified illness cover.

Only you can weigh up whether or not you are prepared to put up with continual price increases on your current policy as you get older and also bear in mind that the premium reviews will become more regular the older you get.
 
Thanks very much for the feedback Stevie. There is undoubtedly a limit on how my I can spend on this so, I can't see it working for me once it reaches the next review.
 
The major causes of claims for specified illness are:

Cancer
Heart Attack
Death (if your policy doesn't have accelerated life cover on it, this won't be relevant to you)
Coronary Artery Bypass Grafting
Multiple Sclerosis
Total Permanent Disability

Be very careful about replacing an old specified illness plan. The older ones don't cover as many illnesses but they have very broad definitions. Also check if angioplasty is covered. It tends to be covered in the old plans but not in the new one (a few companies give a partial pay out).

Don't be dazzled about the amount of illness's covered under the new plans, a lot of them never pay out e.g. CJD is covered, a disease that is confirmed by autopsy! :eek: The life companies are all in competition with each other to see who can cover the most even though a lot of them are extremely rare.

As for the term of the policy, why would you want a whole of life cover for anything? I would question why anyone would have cover after they have stopped working unless there is a specific need such as taking care of a disabled child.

You need to work out when you need the cover most i.e. kids growing up, big debts to be paid off.

Be careful before you make any decision. Those old policies are actually quiet good.

Steven
www.bluewaterfp.ie
 
I agree that most specified illness claims fall under cancer and heart related conditions and the likes of CJD is rare but VCJD can be diagnosed with a blood test so its not correct to say its only confirmed by autopsy. There is an element of an arms race between companies on who can cover most but in general there have been some improvements, for example partial payment on the loss of an eye amoungst others.

Before changing any policy, you should seek independent advice from a reputable financial advisor (not someone with a sales target to meet but who values you as a customer and would hope for referral business).

As Steven points out some older policies can be better but some are not, its a case of examining the pro's and con's and a financial advisor will help you do this easier than tackling it alone as they are familiar with the products and the terminology.

As regards why anyone would want a whole of life policy, one of the main reasons is funeral costs. Often people dont want to be a burden on their relatives and put in place a policy to cover funeral costs. Another reason can be inheritance tax implications. While these reasons are unrelated to specified illness cover, they do demonstrate there is legitimate reasons to have life cover into retirement.
 
Hi Dace69, I had a whole of life policy for 6 years before cancelling it last year. The policy covered the remaining balance on the mortgage and also critical illness cover of 100k. I was advised by a different broker that these policies were not the best available. In fact he said he would not sell one to his enemy. Mine was with Acorn Life. I had being paying 80 euros a month for approx 70 months. In the end I cancelled it and never received anything back. Do you know if it is possible to cash the policy and get some form of refund. I would have assumed if this was true I would have received some refund by now but after 10 months I have not.
 
Thanks very much for all the feedback. I'm told that mine has a value of circa €4K now. I assumed I'd get this - maybe I'm wrong. I'm paying around €70 per month for €86k cover + hospital cover.
 
Ask your advisor what commission he'll get on your new policy, and whether this is a factor in his advice to you.
 
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