Specified Illness cover will only pay out on one claim from the list of specified illnesses. If there is two people covered on the policy then there could be one payout per person. As mentioned earlier if the policy is on an accelerated basis, then the specified illness payout will reduce the life cover amount, if its on a standalone basis then a specified illness payout will not reduce the life cover.
There is a number of plus points to income protection cover;
- it attracts tax relief
- it can cover you to retirement age
- it covers more conditions that would keep you out of work long term
Both types of cover have upsides and downsides, Income protection is probably a little more comprehensive in the overall scheme of things but its not available past retirement age and offers an income until you return to work rather than a lump sum payment. Therefore if you are out of work for a long period it would be superior to specified illness but if you got a quickly treatable non life threatening specified illness then the specified illness cover may pay out more depending on the level of cover you have.
I agree that you should talk to someone about this professionally. I have seen many people cut back on their specified illness cover recently due to budgeting issues but there is long term consequences to this as if they decide to get this type of cover again in a few years when they can better afford it, they will find that the price has increased due to the rates being age related.
You should talk to someone that is independent, not a financial institution adviser as they will only be interested in selling you their product.
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