Learn why investing in both life insurance and critical illness cover could be wise for mums everywhere.
Life insurance and critical illness cover offer a much-needed safety net for mums. While life insurance takes care of your loved ones in the event of your death, critical illness cover supplements your income should you fall critically ill or suffer an injury that prevents you working long-term. Both play a key part in offering financial stability.
In this guide, we look at the key benefits of having both life insurance and critical illness cover as a mum. Read on to learn everything you need to know.
What is the key difference between life insurance and critical illness cover?
In short, how and when the policy pays out is the main difference between life insurance and critical illness cover.
Life insurance pays out a lump sum in the event of a mum’s death. This pay out supports your family while they are grieving their loss. It ensures that your little ones are taken care of financially and takes care of any outstanding debts you may have such as a mortgage.
Critical illness cover is completely different to life insurance. Instead of paying out a lump sum, it supplements your income in the event that you are unable to work due to a long-term illness or injury. Critical illness cover usually pays out a percentage of your salary on a monthly basis. This can be vital as it usually covers the cost of living. Things like mortgage repayments, utility bills and even food shops should be taken care of with your critical illness policy.
Do I need life insurance and critical illness cover?
Before taking out both life insurance and critical illness cover, it’s important to assess your personal circumstances. Both aren’t always essential. While life insurance is beneficial for all types of mums, critical illness cover isn’t.
Investing in both life insurance and critical illness cover could be right for you if any of the below circumstances apply:
- Self-employed mums or small business owners. Self-employed mums are usually not entitled to sick pay or annual leave. All days off go unpaid. And, as such a self-employed mum would definitely benefit from critical illness cover.
- Mums with financial obligations. Some debts (a mortgage, for example) need to be paid even if you’re unable to work. Critical illness cover could be the lifeline you need to get by.
- Mums with salaries that are detrimental to their household. Think about whether your household would manage to get by without your income. If the answer is no, critical illness cover is a wise investment.
Life insurance vs critical illness cover as a mum: what to consider
Here’s a few things to think about when deciding whether to take out life insurance, critical illness cover or both as a mum.
- Take a good look at your budget and consider which type of insurance is most affordable.
- A mortgage, as well as any other outstanding debts you may have, will still need to be paid in the event of your death or incapacity to work.
- Monthly living costs. Things like utility bills and food shops are all unavoidable costs. Give yourself peace of mind that these costs are covered whatever happens.
- Childcare costs. Be it nursery fees, school clubs, or even extracurricular costs, as a mum, these things need to be factored in before deciding between life insurance and critical illness cover.
- Your income. How important is your income to your family as a whole? If it’s vital, taking out both could be the best option.
Once you’ve thought about all of the above in greater depth, you’ll be in a better position to decide between Life insurance and critical illness cover.
How much does life insurance and critical illness cover cost?
Life insurance typically costs between £5 and £110 per month. That said, several factors will affect the costs which we’ll look at in more depth in a moment.
Critical illness cover varies quite drastically too. Most people can expect to pay between £8 and £103 per month.
What factors affect the price of life insurance and critical illness cover premiums?
The cost of both life insurance and critical illness cover really depends on your personal circumstances. The level of cover required will also factor in. The below will all have an impact on the price of your policies:
- As a general rule, the older you are at the time you take out the policy, the more expensive your life insurance and critical illness policies will be.
- Overall health. As you’d expect, your medical history will impact both your life insurance and critical illness policy fees. If you have been diagnosed with an underlying health issue prior to taking out either policy, the price is likely to be much higher if cover is even available at all.
- Things like smoking, alcohol intake and how active you are all affect the cost of both life insurance and critical illness cover.
Other things that will affect the price of a life insurance or critical illness cover premium include the length of the policy and the level of cover. The longer you want a policy to last, the more you are likely to pay. And, how much you want or need each policy to pay out will also be a factor.
How to purchase life insurance and critical illness cover
Life insurance and critical illness cover can be taken out together or separately. The way you choose to purchase your policies is completely up to you.
Do you mind paying two monthly premiums or is one preferable? Is your life insurance provider offering competitively priced critical illness cover as an add-on? Those are two key things to think about before deciding whether you’d prefer to purchase the policies together or separately.
Why secure life insurance and critical illness cover as a mum with Mummy Insurance
At Mummy Insurance, we deliver quotes from all top UK insurers. We’re also dedicated to helping you to conduct a full comparison between both life insurance and critical illness cover. All of our quotes are personalised and our experts are on hand to help guide mums through their purchase from start to finish.
