Life Life Cover / Critical Illness weighting

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Firefly

Registered User
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Hi,

There are broadly 2 types of products in the market from what I can see (and often a seperate product covering both):
Life cover - when you kick the can
Critical Illness - if you are struck down with something terminal

I'm just curious to know, from those that have such policies, what your weighting is - do you pay more for life cover or do you pay more for critical illness?

Thanks,
Firefly.
 
Critical illness cover is more expensive than the similar value of life cover, more people are likely to survive a critical illness resulting in more claims.
 
wbbs said:
Critical illness cover is more expensive than the similar value of life cover, more people are likely to survive a critical illness resulting in more claims.
Click to expand...

Hi wbbs,

Yes I am aware of that, but what I'm trying to understanding is, say you have a policy that costs 100euro per month - how much of that goes to cover the Life element and how much towards Critical Illness?

Thanks,
Firefly.
 
Sorry, misunderstood you, don't think the policy breaks it down, if you did a random quote for both on some of the websites you could compare or have you already thought of that :)
 
Insurers use mortality tables which are based on how long a person of a given age would be expected to live on average. A 28 year old will generally pay more for cover than say a 27 year old etc so it is difficult to advise what the precise split would be. The insurer builds a reserve and claims which occur at an early date are subsidised by policies where claims occur at a later date.

Do you mind me asking you how knowing the split (between the charge for life and the charge for critical illness) in premium would help in your purchasing decision?
 
Sumatra said:
Do you mind me asking you how knowing the split (between the charge for life and the charge for critical illness) in premium would help in your purchasing decision?
Click to expand...

Hi Sumatra,

I'm just trying to ascertain whether people pay more to buy a better life assurance product or for a better critical illness product. If the budget was say 100euro per month, would people go for a 50/50 split or would they spend more on one than on the other, for example spending 40e a month on life cover and 60e a month on critical illness?

Firefly.
 
No Firefly, you see it's not what other people do that is important it is what is right for you that is the overriding consideration. A financial adviser will look at your situation and present you with a plan listing the priorities you need to look at in order of importance. Critical illness may or may not be part of that plan.
 
I agree with Sumatra. You have to see both policies as different and assess your need for them depending your circumstance ( savings / other insurance policies/ age of you and your kids / 1 or 2 income family).

The relative importance of each policy could be very different for different people.
 
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