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Martin Lewis on Income Protection Insurance vs Critical Illness
Review: 09/2024
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Article: Money Saving Expert Martin Lewis Income Protection vs Critical Illness Cover Insurance Guide
In this Money Saving Expert Martin Lewis Income Protection Insurance vs Critical Illness Cover MSE review guide we will look at - these key areas & more...
🔸What's Income Protection Insurance vs Critical Illness Cover? 🔸Does MSE think Income Protection or Critical Illness is worth it? 🔸 How much Illness Insurance cover do you need?🔸Top Tips re Income Protection vs Critical Illness Insurance 🔸 Whom Best to Buy from...
Does Martin Lewis recommend Income Protection Insurance vs Critical Illness Cover?
Struggling to decide between income protection insurance or critical illness cover & looking for MSE Martin Lewis guidance? The Money Saving Expert breaks down some of the pros & cons of each insurance option, providing you with more information you need to review your choices.
Martin Lewis recommends for salary & bills insurances in 2024, that it's 💯 "100% worth reviewing Income Protection Insurance" alongside Critical Illness, BECAUSE it covers a greater range of illnesses.
So, what is the Martin Lewis opinion between these 2 Insurance types, ones that may help protect you & your income should something happen to your health. Does he indeed prefer one over another?
Whether you are employed or self-employed, the Money Expert says there are key differences between both income protection and critical illness cover.
The MSE website touches on just some of these & so we have added our own broker comments, which may allow you to consider those best choice for your own personal circumstances.
Who's Money Saving Expert Martin Lewis?
Background: Who is the highly respected Money Expert Martin Lewis OBE & CBE? He's a very successful Financial Reporter & all round UK Campaigner, plus the founder of the well known UK consumer website Money Saving Expert (MSE).
He also has his own current affairs TV Money Show on ITV first broadcast after all the London Olympics back in autumn 2012.
Martin Lewis is now often seen on TV commenting on current financial matters & affairs. Or daytime TV like This Morning Martin Lewis being the popular go to person for sound advice.
In 2012, his popular Money Saving Expert website was also sold to The Money Supermarket.Com group for reportedly £87 million. Since 2015, Martin Lewis remains executive chairman and in these challenging 2020's all round UK Consumer Champion & Finance Guru.
However, his undoubted success story in 2024 hides unfortunately a very sad story from his past, which he emotionally & honestly explains further in this BBC Podcast.
*What happened to Martin Lewis in childhood?
Martin Lewis has openly told of his own life story, where he unfortunately lost his late Mother Mrs Susan Lewis at only aged 11, in a tragic road accident.
What happened to young Martin Lewis as a Child then reportedly left him emotionally unable to sometimes leave his own house - for upto 6 years (Times Newspaper Article).
Except for going to school, this emotional impact left him he said looking back with both extreme anxiety & trauma. As such, Martin Lewis illness mentally as a teenager back then & during some darker days says he sometimes “struggled to even get out of bed”.
The tragedy on the longer term impact of someone losing a parent so young in their lives, whether this be financial, psychological or both.
As such today he still says 'Financial problems and mental health issues are locked together — it’s about time treatments were linked too', urges Money and Mental Health Policy Institute & its chair founder Martin Lewis.
This then means that he can also speak now with some authority around the subject of mental health and & where he also explores those links with money management.
Some of these Martin Lewis' Money Management books shown below are all therefore well worth a read, especially in this ongoing cost of living crisis.
Important Note: This overview on Money Saving Expert Martin Lewis Income Protection Insurance vs Critical Illness Cover is not a scam fake advert re Martin Lewis recommending our own broker services. As you may be aware he & MSE are fully impartial. Therefore, he does not endorse or support any particular products or providers. Any Martin Lewis Money video's or images shown may also have some out of date information on them - due to the ongoing cost of living crisis. Often these 'martin lewis income protection insurance' or critical illness martin lewis articles may no longer be personally updated or written by the Money Saving Expert Martin Lewis himself but his team. MSE do state he oversees site content, especially the MSE weekly email. Naturally, although MSE is an independant website finance allows no advertising nor subscription, it may receive a revenue via 'affiliate links' to the top products or providers (which we aren't mentioned)
Do I need Martin Lewis Income Protection Insurance Martin Lewis?
Is Income Protection worth it? Well the MSE Martin Lewis says on Income Protection Insurance that it provides a 💯 "100% Tax Free Income" if you're unable to continue to work and earn a living due to an illness, injury or disability for a set period.
Income Protection (also known as PHI Permanent Health Insurance) is a type of protection policy that acts as a financial safety net, ensuring that you can cover most of your essential bills & expenses, even when you are unable to earn an income.
One of the key advantages of income protection insurance they say, is that it covers a wider range of illnesses & injuries that could all prevent you from working & earning a living than say Critical Iillness cover.
Whether that is a physical injury, a mental health issue, or a major critical serious illness, income protection insurance Money Saving Expert says could help provide financial stability during your challenging times.
They clarify that Income Protection will usually pay a 'proportion of your salary', for example 2/3rds, so that any essential spending is covered.
MARTIN LEWIS 100% RULE OF THUMB IN (2024)
INCOME PROTECTION = 2/3rds OF SALARY
Additionally, income protection policies often have a waiting or deferred period before any benefits are paid out eg; after 4 weeks or 8 weeks. This may allow you to choose a suitable waiting period that aligns with any existing employee sick leave pay, savings or other benefits you may have.
However, it's important to note that on income protection Martin Lewis doesn't really expand on is... that it may not cover all pre-existing conditions eg; history of a bad back means that certain exclusions & limitations could apply if you have.
Additionally, the best income protection insurance don't require regular premiums to be paid when off sick ie; inclusive premium waiver.
It's always crucial to carefully review an Insurers PHI policy terms & conditions if & when applying, to fully understand what is or isn't then insured & covered.
The cost of the PHI policy may vary depending on factors such as your age, occupation, smoker status and overall lifestyle & health history.
What's MSE view on Critical Illness Cover?
Is Critical Illness worth it? Well in comparison, Money Saving Expert then says Critical Illness Cover unlike income protection instead pays a "Tax Free Lump Sum", typically upon listed life-threatening conditions such as a heart attack, stroke & cancer.
Critical Illness Cover Insurance, as the name suggests, provides a lump sum payment if you are diagnosed with a specified serious critical illness as listed by Insurers.
One of the advantages of critical illness insurance is that the lump sum payment focuses therefore on providing financial support, specifically related to the diagnosis of critical illness types.
It can help provide immediate financial relief, allowing you to focus on your recovery without worrying about the financial implications of your illness.
On Income protection insurance vs critical illness Martin Lewis says it does not cover the inability to work due to other reasons eg; broken leg or mental health conditions.
The lump sum payment from critical illness insurance he says can be used for anything you may like eg; help pay off your mortgage, cover lost income whilst off sick, ongoing day-to-day expenses, repay debts, or provide financial security during a difficult time.
The illnesses covered by critical illness insurance can vary depending on the specific policy, but common conditions include cancer, heart attack, stroke, and major organ transplant.
Again it's important to review the critical illness policy terms to understand which conditions are or aren't covered and if any exclusions that may apply.
However, it's important to note that many critical illness insurance plans typically only pays out once, and the policy ends after a successful claim.
Additionally, the cost of critical illness insurance may vary depending on factors such as your age, health & family history, and the level of coverage you choose.
However, on critical illness or income protection money saving expert doesn't remark that it is not linked to your salary (unlike PHI) when you're calculating any cover levels.
MSE remarks that each policy types are designed to both help protect your income, or ongoing bills & lifestyle against the threat of an accident, serious illness & hospitalisation.
Let's have a further look at what Martin's Money Expert view is on the main Pros & Cons of each insurance policy types - between "Income" or a "Lump Sum" - plus our own thoughts as Professional Insurance Brokers.
'Martin Lewis Income Protection Insurance'
*Martin Lewis Income Protection Guide 2024
Unlike the similar sounding family income life insurance (that is setup to pay out if you die), this is a totally separate type of salary or income insurance protection cover, which is paid out if you are too ill to work & so earn a living.
As such, Income Protection MSE says pays upon diagnosis of MOST types of sickness, accident or hospitalisation. Whether they then either result in physical or mental health issues.
Something that may possibly happen to you, and so therefore realistically prevent you from working & performing your own occupation. Those main job role daily tasks, that could suddenly stop you from earning a living & unable to pay the bills.
However, strangely on income protection insurance Martin Lewis MSE comments currently don't go in-depth into this topic on their website to date, other than say it generally includes a greater range of illnesses than critical illness cover, but it can also be more expensive.
Insurers vary again here with their offerings but some can cover upto 65% of your gross salary or if self employed your net income. When it comes to deciding between the two types of insurance, as usual they say it could be worth getting advice.
If you are self employed, then the buck usually stops with you if off sick. If employed, then perhaps your employer offers discretionary cover for say 3 months or maybe it's just statutory sickpay ?
Don't expect Government support to fully step in after this & cover all your lost income, State Benefits are often usually less than £100pw. During the recent Pandemic for example, money saving expert explained the support available to you.
Do I need Income Protection and Critical Illness Cover?
Key Differences between Income Protection & Critical Illness?
When understanding between Income Protection vs Critical Illness Martin Lewis on insurance benefits, MSE recommends talking to a financial adviser who can better assess which options aligns best with your overall needs & circumstances.
*Benefits:
- The primary difference between income protection (PHI) and critical illness cover insurance is the cover benefits they provide.
- MSE Income protection insurance it says covers a broader range of circumstances if you maybe unable to work, including illness, accidents & mental health issues.
- PHI is only usually taken out on a single not joint policy basis - unlike Critical Illness cover which can be single life or joint life 1st claim.
- Critical illness (which MSE says is often combined with life cover) on the other hand, focuses solely on providing a lump sum payment benefit in the event of a specified serious illness.
*Payouts:
- Another significant key difference lies in how these 2 insurance benefit types are paid out.
- PHI Income protection insurance moneysavingexpert says provides a 'tax free' regular income, usually a percentage of your pre-disability gross earnings.
- This could be for as long as you are unable to work, until retirement, or until the policy claim period ends eg; 2 years per each claim.
- Critical illness cover on the other hand, also provides 'tax free' usually a one-time lump sum payment upon the diagnosis of a covered critical illness.
- For some critical illness policies, upon payout they may then end permanently. For more comprehensive plans, some may enable several different critical illness types of claim.
- The lump sum can be used however you see fit, whether it's paying for medical expenses, covering debts & avoid arrears, or providing other financial security.
* Eligibility:
- The eligibility criteria for critical illness or income protection insurance UK Money Saving Expert says may differ.
- Income protection insurance MSE points out often takes into account factors such as your job, health, and income when determining eligibility and monthly premiums.
- Critical illness cover insurance also considers factors such as your age, health & family history, plus the level of coverage & term you choose.
- The higher the levels of cover for either insurance policy, the more likely Insurers will require a GP report or nurse medical.
- It's important to carefully review the eligibility criteria for each types of insurance to ensure you meet the requirements.
Factors if choosing between Income Protection vs Critical Illness?
Before making any decisions between Income Protection and Critical Illness Insurance MSE says like Martin Lewis on life insurance advice, it's essential to consider several factors that may impact your choice.
By evaluating these factors, you can make a more informed decision that aligns with your current & future financial situation & priorities.
*Regular Financial Commitments:
- Assess your regular monthly financial commitments eg; include mortgage or rent payments, ongoing bills, plus other essential expenses.
- Consider how all these commitments would be impacted, if you were unable to work due to accident, illness or injury.
- Income protection insurance can help to ensure you have an ongoing regular income to help cover all these expenses.
- In essence income protection may help to prevent a credit or money crisis & ultimately protect your credit history
- Whilst critical illness cover Martin Lewis says can provide a once off lump sum payment that can be used to manage your financial obligations.
- In an ideal world as your ultimate back up plan, we would add as brokers that you should have both comprehensive policies.
*Existing Insurance Cover:
- Take into account any existing insurance protection cover you may have
- For example any employer sick leave eg; 6 months full sickpay, work disability insurances, or other discounted benefits provided or possibly available via your employer.
- Martin Lewis always says, don't necessarily rely on any work offerings should you leave them, get made redundant or maybe they're withdrawn
- Understanding the extent of your existing insurance cover, can help you determine if income protection or critical illness insurance would help fill any gaps in your financial protection.
*Health History:
- Consider your own health history & any pre-existing conditions you may have ie; it could mean a broker may need to shop around for your best deals
- Dependant on your medical history, it could be one type of insurer's deal may be more suitable than the other.
- Some insurers policies may exclude coverage for pre-existing conditions, so it's crucial again to review the policy terms to understand what is covered and what is not.
*Costs:
- Evaluate the cost of each protection insurance option and how it fits within your monthly budget & outgoings.
- Both Income protection & critical illness insurance typically may require you to make regular monthly payments.
- Consider those costs in relation to the cover provided & your overall financial situation if the worst should happen.
- MSE says if you don't rely on an income from working, you’re less likely to need critical illness cover
- Also you maybe unable to get income protection protection if you are not working ie; not protecting an income
By carefully considering all these factors, you can weigh up the pros and cons of income protection vs critical illness insurance MSE says and make a decision that aligns with your own circumstances.
Again if unsure here what to do, or whom maybe best insurance Martin Lewis always says speak to a financial adviser.
Pros & Cons of Income Protection Insurance?
Like any insurance product comparison, Money Saving Expert on income protection vs critical illness says there pros & cons.
Martin Lewis points out in a nutshell that although PHI generally includes a greater range of illnesses than critical illness cover, BUT it can be more expensive.
Pros:
- Provides a regular tax free income if you are unable to work due to illness, injury, or mental health conditions.
- Covers a wide range of health circumstances than critical illness that may prevent you from working, giving you 'peace of mind'.
- Can be tailored to your specific needs, with options such as adjusting the waiting deferral period & benefit payout periods.
- These options like cheaper age costed policies can help make the premiums more affordable
- Choice of level or inflation increasing income protection insured on a single person basis
- May include additional umbrella benefits such as rehabilitation support or partial disability back to work benefits.
Cons:
- Usually only be taken out on a sole policy basis (not joint 1st claim)
- Premiums can be relatively expensive compared to say critical illness
- Unlike critical illness cover Insurers may underwrite differently on your occupation, age & health history
- Some policies may have exclusions or limitations eg; pre-existing conditions or certain illnesses
- Cannot usually be setup on a joint 1'st claim
- Generally doesn't include redundancy cover unless classed as an ASU style policy
- There may be a deferral waiting period before benefits are paid out
- The income protection payout benefits could be limited at claim eg; 2 years per each claim
- It's important to plan for any potential gap in income during/after these periods
Pros & Cons of Critical Illness Cover?
Money Saving Expert Martin Lewis on Critical Illness cover Pros & Cons is that he states ...Many people believe that Critical Illness policies will pay out IF you get ANY serious illness & then can't work. BUT as MSE points out - this is simply NOT true.
Martin Lewis says many Critical Illness Cover policies are taken out in a combination with life insurance also.
This could be set up in a couple of ways, either as integrated/combined OR additional cover. They explain that they work differently in terms of how they pay out:
*Integrated / Combined Critical Illness Lifecover
This critical illness combination will only pay out once - upon the earlier claim if you are firstly diagnosed with a critical illness or alternatively if you died of an accident.
This means that if you are unlucky enough to get a critical illness and it then pays out (but then you pass away after that a few years later) that policy style would only pay out just the once.
However, for the cheapest broker deals we would add that this is often the cheaper way to take out life and critical illness cover policy. We often see this combination used to help protect a mortgage.
*Additional Critical Illness & Lifecover
This seperate option of critical illness cover & life insurance means it could pay out twice - both if you are either diagnosed with a critical illness and/or if you then died whilst the policy is still active.
Because it has the potential to pay out more than once, these additional life insurance or critical illness cover Martin Lewis remarks tend to be more expensive than cheaper combined covers.
Pros:
- Provides a tax free lump sum payment upon the diagnosis of a specified critical illness.
- Money can be used however you want ie; help repay your mortgage, ongoing day-to-day expenses, repay debts, or provide financial security during a difficult time.
- The lump sum payment allows flexibility in how those funds are used.
- Options of family level, inflation increasing or decreasing mortgage protection.
- May include child coverage payout as well (unlike income protection)
- Can be setup on a single or joint 1'st claim eg; cover a joint mortgage.
Cons:
- Many critical illness insurance plans may only payout once.
- More comprehensive policies can be more expensive than basic plans that may only cover 3 illnesses ie; cancer, heart attack & stroke.
- If setup on a joint 1'st claim basis - the policy may end after that successful first claim leaving the other insured person with no cover.
- Offers cover only for the specific serious illnesses as listed, so providing more targeted financial protection.
- Some plans can be reviewable which means their premiums may increase at review.
Ultimately, you can determine if you listen to what's Martin Lewis Income Protection Insurance vs Critical Illness say or not, or indeed both plans.
MSE Tips: Best Income Protection & Critical Illness Cover?
Money Saving Expert on income protection and critical illness cover have given some of their usual financial hints & tips to help you find the best policy for your needs:
*Don't Buy Direct from a Bank or Insurer
- Research Multiple Provider Quotes + Don't settle for the first bank or insurer direct deal you come across ( we say ignore free gift insurance deals).
- MSE doesn't compare specifically income protection or critical illness insurance offerings, coverage or reputations.
- We say always look for those providers with a strong track record
- Often people nowadays also check positive reviews from say Trustpilot, Feefo or Defacto ratings.
Note: He here also points if buying any of these protection products via a mortgage broker Martin Lewis remarks be aware MSE says it may not be the cheapest route.
He points out they may only deal with a more limited panel of Insurers, so consider to use a life insurance broker instead.
Martin Lewis says Use a Broker for Best Deals for Income Protection and Critical Illness Cover & always Seek Professional Advice if you're unsure
*How to cut Income Protection & Critical Illness costs?
Martin Lewis advice on critical illness or income protection insurance here suggest a few options....get quotes from a number of insurers.
OR to simplify the process, MSE says it can be worth using an Independent Financial Adviser or Specialist Brokers to buy it.
Option 1:
Get Advice from a Broker "Best if you need help choosing"
Money Saving Expert asserts that this is best if you are not sure what kind of income protection insurance or critical illness cover policy you need.
Alternatively, if you have complicated medical conditions or other circumstances, they recommend it is best to get some advice before you buy.
Doing this means the financial advisor will take some commission, so they claim it is not the always the cheapest way to buy – though as MoneySavingExpert advise it should result probably in the 'most suitable' income protection insurance or critical illness policy.
Option 2:
Buy via Discount Broker "Best if you know what policy you want"
MSE notes that if you feel confident here that you know exactly what you want, then you can go via a specialist discount broker.
They indicate this is generally the cheapest way to buy critical illness & income protection insurance, rather than buying direct from a Bank or Insurers BUT it does rely on you knowing exactly what sort of policy you want to buy.
Money Saving Expert income protection insurance and critical illness cover advice here declares that they would suggest checking at least two & perhaps add in the third if you have time.
As always they comment that, if you are not sure what you are doing or if a policy is suitable, it is always better to get expert advice before buying.
MSE: Critical Illness vs Income Protection Advice v Guidance?
Money Saving Expert notes that if you do pick up the phone to speak to anyone before you buy, then make sure you are 100% clear on whether you are actually getting any 'advice' or just ‘guidance’
They say please ask the person you are speaking with what is their professional status. For the novice we say it can be most confusing here...Note: we are brokers who do give whole market advice
*Advice
If they are fully advising you, they will need to do a full check on your financial and medical circumstances and insurance needs - before suggesting any critical illness policies to you.
*Guidance | Non Advised Only
If they are just giving you information about critical illness or income protection policies they provide or only just answering your questions, that is fine or some; BUT here you should not be pressured into taking one policy type over another.
MSE: How to Complain about Insurances?
The Money Saving Expert Martin Lewis is always about helping to look after consumers and their insurance rights. As FCA fully regulated brokers we also understand the importance of this.
In their various insurance guides, they usually finish off with information about how to complain if you have a problem with either your critical illness cover or income protection insurance and some things to look out for.
Finally they remark, the insurance industry does not always have the best reputation sometimes for their customer services. Plus, while some UK Life Insurers may be good for some people, it can also be hell for others.
So if complaining Martin Lewis Income Protection vs Critical Illness or both, MSE suggests common problems may include claims either not being paid out on time or at all, unfair charges, or exclusions being hidden away in the small print.
Should you have to unfortunately complain, Money Saving Expert contends it is always worth trying to call your provider first. However if not, then you can use their free complaints tool Resolver.
The tool helps you manage your complaint, and if the insurance company does not play ball, it also then helps you escalate your complaint to the free Financial Ombudsman Service.
Conclusion: Martin Lewis Do I need Critical Illness vs Income Protection?
With our MSE Martin Lewis Income Protection Insurance vs Critical Illness overview guide, we say both options offer valuable financial protection. However, as seen they differ in terms of their coverage, tax free payment structure, and eligibility criteria.
Choosing between these 2 policies moneysavingexpert income protection vs critical illness insurance says is an important decision that requires careful consideration.
By understanding the pros and cons of each option and considering factors such as your financial commitments, health history, and budget, you can make an informed decision about which insurance is the best fit for your needs.
Also, bear in mind their website is called Money Saving Expert. So the first question they will always ask will relate to saving you money, not spending it... if you don't have to ie; They say ultimately, you do not need to have either types of illness cover.
However, despite what the Money Saving Expert Martin Lewis comments about say Critical Illness cover policies, we believe they are an important protection to have in your back up family or mortgage protection plans.
The chances of a critical illness vs income protection insurance claim for any of us is sadly high in our lifetime. The immediate & ongoing impact then on our family and finances eg; pay off all or some of your mortgage if you are incapacitated with a serious critical illness.
Bottom line though as always, you pay’s your money and takes your choice of perhaps one or all protection product area combinations. How much can you afford to set aside each week to help protect yourself, your lifestyle and finances?
If you can afford it, our own thoughts aside from what's Martin Lewis Income Protection Insurance vs Critical Illness view, are ideally following these 3 principles.
- Lump Sum > Repay any mortgage & debt costs
- Income > Help cover your regular monthly bills & expenses
- Lump Sum > Back up for holidays, education, emergencies
Remember, protection insurance is an investment into your longer term financial well-being and so provides peace of mind during uncertain times.
As brokers we say let us take the time to research and compare these 2 policies, read that fine print, by seeking professional advice as needed.
Review 'Martin Lewis Income Protection vs Critical Illness' by Martyn Spencer Financial Adviser (2024)
For reassurance re health for men & women – we review many of the best Life Insurers selling Income Protection & Critical Illness in UK (inc NI)
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*Any comments & views expressed on this income protection v critical illness Martin Lewis Money Saving Expert review are for generic information only. They are not personalized advice or necessarily reflect MSE views.
This overview on Money Saving Expert Martin Lewis on Income Protection vs Critical Illness Cover is not a scam fake advert re Martin Lewis recommending our own broker services. As you may be aware he & MSE team are fully impartial. Therefore, he does not endorse or support any particular products or providers. Any Martin Lewis Money video's or images shown may also have some out of date information on them - due to the ongoing cost of living crisis. Often these 'money saving expert income protection insurance' or critical illness martin lewis articles may no longer be personally updated or written by the Money Saving Expert Martin Lewis himself but his team. MSE do state he oversees site content, especially the MSE weekly email. Naturally, although MSE is an independant website finance allows no advertising nor subscription, it may receive a revenue via 'affiliate links' to the top products or providers (which we aren't mentioned)
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