Life Critical Illness Insurance

Life critical illness is the often used search term for a life assurance policy which has critical illness cover as a built-in option. The majority of people taking out a mortgage in the UK will take out a life assurance policy. They do this because they do not want their debt to be passed on to a partner if they were to die before the mortgage was paid off.

This is perfectly good advice. Who would honestly want their partner to risk losing their home because they could not afford the mortgage on just one salary? The minority of people who don’t see the sense of life insurance often say that they would simply sell the property if their partner died and could not afford to maintain the mortgage on one salary. Where would they go next? What could they afford on one salary? What kind of a price would they have to sell the property at given the current market conditions?

Life assurance doesn’t cost much. Why risk losing a home? Statistically though, premature death before the end of the mortgage isn’t all that likely. You are, however far more likely to suffer a critical illness. Cancer Research alone states that you have a 1 in 3 chance of being diagnosed with some form of cancer before age 65.

Strangely enough though, people tend to favour life insurance over life critical illness insurance. Why? Cost is the answer. If you are unlikely to die prematurely before the end of the mortgage then your premiums will be lower. £150000 to a 30 year man doesn’t cost much at all so an insurance policy is seen as good advice and acceptable to the budget. Life critical illness however, costs a good bit more simply because statistics say that you are far more likely to claim.