Critical Illness Cover or Income Continuence?

hole in my lovelywall

I’m looking to change insurance cover and, just in general terms, would anyone have a preference for adding critical illness to my mortgage protection over income continuence?
Is one cover better than the other?

Henry Ford III

They are very different animals.

STANGUILFOYLE

Lot to consider for you before making the call here.

Have you a partner, is he/she providing an income for the household?
Have you a good sick pay benefit through work? - might be a maximum of 6-12 months so find this out first.
Any children that you will need to provide for or cover their child care costs?
What other borrowings will you need to make repayments on if out sick?

Its really all about you deciding on a replacement income figure that you must have coming in each month, in order to cover your monthly bills and ensure that you do not suffer a major drop in income each month you are off through illness. Try and work out what you need each month, allowing for only being in receipt of State Illness Pay of approx. €866 per month. Add up all your "must pay" expenses such as mortgage, loans, credit card balance, insurances (car,house,life) household (food,electric,TV,mobile,petrol,etc). This should give you a better idea of what you might need to put in place on yourself.

Pros and cons for both serious illness cover - SIC - and income continuance (known as Income Protection-IP) - tax relief available on IP, not available on SIC. SIC is a lump sum and IP is a monthly benefit which could last for anytime between 5-25 years, depending on severity of your illness, incapacity.

A good independent broker should help you to make the right call for your own circumstances. Good luck.

hole in my lovelywall

Thanks for the reply.
I’ll have to find an ‘independent’ broker.

Henry Ford III

STANGUILFOYLE wrote: »

..Pros and cons for both serious illness cover - SIC - and income continuance (known as Income Protection-IP) - tax relief available on IP, not available on SIC. SIC is a lump sum and IP is a monthly benefit which could last for anytime between 5-25 years, depending on severity of your illness, incapacity.....

Where did you get that from Stan?

PHI can pay potentially for much much longer. The aggregate potential sums are huge.

40+ year claims are possible.

S.I. pays out on a dread disease (cancer, stroke, heart attack + others, but there are plenty of exclusions and you have to survive the event too).

PHI can pay out for extended periods where you can't do your job - might be a really chronic back issue or depression for example.

There's a place for both but it's important to realise what you're buying, so proper advice is vital in this area.

skippy2

As Someone who had the misfortune to need to avail of my IP at at a young age at the peak of my income earning potential was i ever grateful for it. I also had Pension Premium Payments protected. This will continue until my official retirement age. A lump sum would have been spent long ago and of little use for someone with a young family.