Iâ€™m not getting critical illness insurance at the same time as purchasing my house. Under pressure from my mortgage advisor, I signed up for both life assurance and critical illness cover. It was just easier to do this than to have to defend a decision to go without. Within a fortnight however, (and before Iâ€™d handed over any cash) I cancelled my applicaton.
I decided not to go ahead for two main reasons. The first one is that Iâ€™m reasonably certain that the policy offered to me by my mortgage broker was not the cheapest available. They only offer policies from one company and itâ€™s a truth universally acknowledged that shopping around will give you a better deal.
The second reason, and the one that explains why Iâ€™m not purchasing it at all, is that I donâ€™t believe I need it.
The type of critical illness cover I was quoted for pays out a lump sum if you are diagnosed with one of a list of illnesses of disabilities. These are generally life-threatening or seriously life-altering diagnoses such as cancer, paralysing spinal injuries, etc. Its assumed that you will use the lump sum to pay off the mortgage so that you wonâ€™t have that to worry about.
In my case, I have no dependents and I have accident, sickness and unemployment (ASU) insurance already. This means that if I got one of the illnesses on the list, I would get a monthly income from the ASU insurance and no one else is relying on me to provide for them. I would also get this if I was diagnosed with a critical illness not on the list.
To me thatâ€™s a better benefit than paying off the mortgage completely, after all, Iâ€™ll still have other bills to pay. Knowing my luck Iâ€™d be bound to get something not on the list at all and then Iâ€™d have paid out the premiums for nothing.
So Iâ€™m gambling that I wonâ€™t get one of the illnesses on the list â€“ and it seems like a pretty reasonable bet.
- money decisions last week
- could you afford to lose your income?
- stealing ideas: the least important bill