Mortgage protection + serious illness

Hi,

Has anybody got any opinions on whether or not we should take out serious illness cover on our mortgage protection. We have quotes with and wiithout. Some people advise taking it and others say its not worth the extra money. Any advice would be welcome, Thanks.

B

Re: Mortgage prtection + serious illness

It really depends on the terms & conditions (e.g. under what circumstances and for how long it will pay out) and the chances of you actually needing to claim on it. In general I personally would advise against it as it is often bad value for money (e.g. high commissions) and restricted in terms of when and for how long it pays out. However some people may value the peace of mind that such insurance buys them even if then never have to claim on it.

Re: Mortgage prtection + serious illness

I would avoid linking serious illness cover into mortgage protection for the following reasons;

1. It would make the policy very expensive.
2. If you were unlucky enough to need to claim on the SIC the funds would automatically go to clear your mortgage. OK, you'd have no mortgage but - presuming you weren't able to work - you wouldn't be able to extract equity from the property to live on and, in a worst case scenario, you'd have to trade down.

A separate SIC for (say) a sum equal to two years salary where the claim would be paid to you directly is a much better option. Check out what health benefits you get from your employer too.

Sarah

www.rea.ie

Re: Mortgage prtection + serious illness

And don't forget that many people (in particular those on Class A PRSI) will most likely qualify for PRSI linked non means tested welfare benefits such as Unemployment Benefit or Disability Benefit or maybe means tested benefits if they find themselves out of work or unable to work.

Re: Mortgage prtection + serious illness

Sarah/Clubman,

Thanks for the replies. We are both covered under a employer paid VHI policy for health insurance. Personally I would go without the SIC but my girlfriend is being swayed by a story from a colleague who was out of work for a long time with breast cancer. Thankfully she recovered but it put serious pressure on her husband to keep up payments. I'm just weighing up the pros and cons.

Is a seperate SIC policy taken out by many people?

Thanks,

Brian