Critical Illness Cover

It pays out a lump sum if you get a critical illness regardless of your ability to work. If you have PHI and can still work you won't get a payout from it, but you would from CI if the claim conditions were met. Would you want a lump sum even if you could still work - pay off your mortgage - go round the world on a final fling - drink yourself into oblivion? If 'yes', then CI's a good thing. If 'no', then it isn't. Depends on you and whether you want to pay for it.

Life cover does not benefit you, only your nearest and dearest (generally speaking).

Rob Graham

Yes

Like Rob said.

Search the uk.finance archive for more -

My father had PHI and no CIC.

He had a heart attack which left him with permanent damage. After his heart attack, he was deemed eligible for work, and PHI wouldn't pay out. But his employer couldn't have him back, as he needed to be healthy to work there. And at 50 odd with a bad ticker, he had to take early retirement. With CIC he would have had a lump sum behind him.

I had to have major surgery out of the blue this year. I'm self-employed & CIC took away the financial worries that many of my peer group in the ward suffered, a major benefit from my viewpoint. Only 2 months earlier I questioned whether the premiums were good value but luckily inertia stopped me cancelling. My IFA also advised me to make sure that the CIC is paid from my personal accounts not my companies.

The original reason for it was to clear the mortgage, but the standing orders are just about being cleared by Income protection cover & the CIC lump sum is stashed away in case I really can't get back into interim management. A useful comfort in trying times.

Tom

It is very interesting issue. Here is a quote from my discussion with another financial scurity advisor regarding the difference between CI and terminal illness (TI) benefit providing complementary by some term life insurance policies. First of all, it is not clear what is really better - to have strict list of illnesses leading to receiving benefit or just to define it as terminal. We know that new illnesses come up and definitely client wouldn't be happy to know that he is not eligible for benefit just because his illness was explored recently. Second, if client survives after receiving terminal illness benefit there's no difference between two, as well as there's no difference in case of his death. The only difference is possibility to get this benefit just after definition of certain illness whether it is terminal or not. But based on above I would say it is difficult to decide what is really better for client, and it should be probably at client's discretion. If you still think that these benefits are completely different and incomparable ask yourself - are you able to find any prospect who would consciously buy both?

In message , Nikolay Chikhachev writes

You dot 'BUY' TI, its just bundled in with Life Assurance. You dot get a TI pay out and then survive, there has to be no chance of you living for more than a set period. All TI is doing is paying out the death benefit to you, just before you die so you can enjoy it, rather than paying it to you estate later.

CI pays out on diagnosis of an illness form a prescribed list, and you must survive a set period after that diagnosis before the claim is paid, i.e. the illness can not be fatal.

I cant see any similarities between the two, and one is certainly not a replacement for the other.

Your question regarding 'who should buy both' should really be 'should you buy CI and Life Assurance?' They are two quite distinct things.

"john boyle" wrote in message news:gWGLPeYlQN2$ snipped-for-privacy@johnboyle1.demon.co.uk...

I like your expression 'no chance of living' for more than a set period'. You need to be God to arrange it, don't you? If you look at LI with TI (let's say 100,000 LI with 40,000 TI advance) you will see that it's cheaper than LI without TI plus CI (60000 LI plus 40000 TI). Now let's try to compare incomparable benefits. In first case you get for example 40% of death benefit in advance if you have any illness with insignificant probability of survival (virtually 0) and you can use this money in certain period of time (let's say 6 months). In second case you get the same amount if you survive for certain period of time after certain critical illness (as a proof that the illness is not fatal) and you have indefinite time to spend this money. If I don't have a family history of certain condition I would prefer first protection. And if I have it what are the chances to be approved for CI? The most important question is: what is protected by CI? LI withTI protects income of insured (you are unlikely going to work in 6 last months of your life). But when you survived certain condition and it didn't limit your ability of getting income (otherwise it would be covered by disability insurance) what is the real need for this protection? Your expenses in the process of recovery? They may be covered by medical insurance. So I come to the conclusion that CI is rather artificial type of insurance. Nikolay Chikhachev

In message , Nikolay Chikhachev writes

OK, but I t5hink you are trying to compare two quite separate products, i.e baked bean and spaghetti.

There are many people who dont have a need for CI or for LI which is fine. I can cite an example where it was beneficial when a single woman suffered a stroke. She recovered but couldn't do her original job. She didnt have LI just CI but her mortgage was repaid. TI would have been useless for her.

The most important question is: what is protected by CI?

You have to check the individual companies' conditions to find this out but generally there about 25 - 30 conditions covered and generally you have to survive 15 days to get a claim. As I said in a previous post, if you don't like and don't need the cover then it's not for you. But there are plenty of people who do, and so they do it.

Rob Graham

Hi there,

I'm new to this group so I hope this hasn't been asked before.

If I take a private life insurance policy with critical illness cover and my employer pays the premiums, would this count as a taxable benefit? The reason I ask is that in a former job, I had life cover as part of my package and it never appeared on my P11d, so I assume it is not counted as a benefit as such.

Thanks for any input.

Yes

Rob Graham