Life Critical Illness Claimed Premium remain the same (for 18yrs) even tho' wife excluded

[TurningGreen]

We had a joint critical illness cover plan for my wife and I that would pay on either or both of us becoming ill. Unfortunately we recently had to claim for my wife. We expected that the cost of the critical illness policy would drop as my wife would no longer be accepted on the policy. However having rang the insurance company they informed us that this was a term policy and explained the cost would remain the same (another 18 years) even though my wife was now excluded. This policy rule was never mentioned by the broker at the time and the insurance company didn’t seem surprised. After some conversation with a manager in the insurance company they have given us the following options

(1) Remain on the current policy and continue to pay the cost of €335 pm

This policy is index linked so cost pm and payout increase yearly by 5%

No new health check required for me

(2) Convert the existing policy to a non term policy for just myself and pay €267 pm for 18yrs

This policy is not index linked so cost pm is fixed and payout is fixed

No new health check required for me

(3) Our final option is to cancel this policy and go look at a new critical illness policy for just myself and go through a new health check.

Our current feeling is to go for option 2 or 3 but for a sanity check I am just wondering if anyone has experience or advice that they could share with us on the above situation and any other possible unknowns we should be aware of.

Thanks in advance

 

[StevieC]

Keeping the premium the same is common after a claim, the company naturally try to earn back some of the amount they paid out.

The most common thing to do in your situation is to repropose as a single life (option 3). However beware, do not cancel your existing policy before you have confirmation of cover elsewhere at an acceptable price. The last thing you want is to cancel your policy and then find that you cant obtain cover elsewhere or even that you can but have been medically loaded to such a degree that the existing policy would have been cheaper.

The best thing to do is ask an independent broker to shop around for the cheapest price they can get for equivalent cover and put a proposal in to that company. There is no need to start that policy until you are satisfied that you have acceptance and that its cheaper than what you are paying now.

Beware also of option 2 as often non term policies (also known as whole of life policies) have reviewable premiums, so long term you dont know how much you will have to pay to keep the benefits you originally proposed for.

Hope this helps


www.CheaperLifeAssurance.ie

 

[pj111]

It's difficult to be able to give full advice here as there is a bit of info missing.

There could be 2 components to the joint life policy, critical illness cover and life cover on an either/or basis.

If the policy had the same critical illness amount as the life cover, the policy would be finished as it would be payable on a first claim basis.

If the policy had double cover, the premium usually decreases by the amount of the now paid out benefit of the serious illness cover - I know of 3 insurance companies off hand that would treat the policy as such.

I think it would be wise to have a broker check it out for you because option 3 is not always the best option because you most likely are 2, 7 or 12 years older now than when you first took out your policy.

Patrick

 

[StevieC]

Patrick, if its a joint life policy which the original poster says it is then there is only life cover left on the policy even though the client is paying a premium for specified illness cover as well (if its an accelerated policy and the life cover is the same, then the policy would have finished). The original poster makes no reference to it being a dual life policy which implies that the cover was standalone (this would need to be checked). In this case its safe to say that on a like for like basis, a new policy will be cheaper. In all likelyhood, even with a few years gone the policy will be cheaper as only one life would be covered for specified illness cover now.

Based on what has been said above, option 1 is not a favourable option. Option 2 has the danger of being a reviewable premium policy which is in my opinion a bad choice. Option 3 should be investigated as it at least can be a like for like quote. Remember that while the original poster has aged the term required has decreased and several companies have reduced their premiums in the last year. It could be possible to get the same cover cheaper. There is a risk of the spouse being rated for life cover but the original poster does not have to proceed with a new policy if it doesnt work out better.

Investigating option 3 with an independent broker is the original posters best course of action at this time.


www.CheaperLifeAssurance.ie

 

[pj111]

The fact that there is likely to be 2 components on the policy is even more reason why the premium should be reduced. (A dual policy merely quadruples the cover). I covered all aspects of this in my post.

Which insurer is this with TurningGreen and what is the name of the policy ?

Patrick

 

[Sumatra]

Turning G, if you are still there, you took out the policy to provide a payment in the event of serious illness or death. That event has now happened and it is now time to re-evaluate your requirements (if any) based on your current situation and aspirations. Be careful not to fall into the trap of dealing with a sales person whose sights are firmly fixed on the €335 a month you are currently paying. If you were getting a quote for a new bathroom you'd get two or three quotes before you make your decision. Insurance should be no different especially when you may be talking about such a financial commitment. Wishing you the best.