Critical Illness should I take it out.

[ccmurf]

Just got a quote from BOI for critical illness and mortgage protection for €58 . I feel this is a little pricey as I am a non- smoker in my early twenties. I need advice on taking out critical illness. If you are diagnoised with an illness is it straight forward to get your lump sum or is it a con.
Thanks
cc

 

[Squonk]

At your age, there's more of a chance of you being diagnosed with a critical illness than dying. I'd day it depends on your personal situation...if you are married with kids and don't want them to be knackered if you can't work then I'd say yes. If you live at home and have no dependents then you might want to take your chances.

 

[Sarah W]

I wouldn't advise a combined mortgage protection and serious illness policy for 3 reasons;

1. It is much more expensive than basic mortgage protection
2. It's a hassle to change a policy once it's assigned to a lender
3. And most importantly in the event of a claim the proceeds are paid directly to the lender. OK, the mortgage would be gone but you may have preferred to use the serious illness part of the cover to pay for medical expenses or some other purpose.

At your age the statistical likelyhood of suffering a critical illness covered under the policy (bearing in mind the medical definitions are very precise) is very low. Save your money and go for the cheapest mortgage protection and then look into Permanent Health Insurance (PHI) if your employers don't offer in or stand alone critical illness cover at a premium that suits you.

Sarah

www.rea.ie

 

[ccmurf]

Thanks for your help. I am re - considering critical illness. I can't understand in the event of a claim how the bank gets paid and I don't. Can someone explain this to me , please.
Thanks
cc

 

[Sarah W]

If it's a combined mortgage protection (life) and CI policy it has to be legally assigned to the mortgage lender. This means that the money goes to them in the event of a claim (death or serious illness) to repay the mortgage as they are the beneficary as a result of the assignment.

Sarah

www.rea.ie