Legal & General have recently advised Financial Advisers and Mortgage Brokers to go back through their old client files and highlight clients who declined Critical Illness Cover on the basis of affordability. As mortgage interest rates have reduced signinficantly recently, so too would monthly mortgage payments provided the clients were on a tracker or variable rate deal. In theory Legal & General should be quite right. Critical Illness cover should be more affordable now but will clients see it this way in the current climate?

This recession is not not like the recession we had in the late eighties and early nineties. Mortgage rates then were far higher but ours now are lower than ever before. Inflation is dropping quickly. In fact most things are cheaper now than they were a year ago so will clients see this as an opportunity to take out Critical Illness Cover?

As long as consumer confidence stays low then those people who shunned Critical Illness a while ago probably won’t see the sense in it now which is a shame as it’s when times are hard that insurance policies prove to be most valuable.

Warren Buffet (one of the world’s richest men) once said that he was fearful when others were greedy and greedy when others were fearful. In other words, he would see the current climate as a time to spend and invest. Maybe if everyone had that kind of attitude towards Critical Illness Cover (and other commitments) a recession could be potentially limited. It’s spending that gets us out of recession, not saving.

A recent blog suggested that nearly half of Brits have no life assurance whatsoever and nearly three quarters shun Critical Illness Cover.

This is madness. Life assurance and critical illness cover are there for the bad times and we are going through bad times now and it will get worse. Why people cannot see the advantages to critical illness cover is beyond me.

Cancer research state that we all have a one in three chance of being diagnosed with some form of cancer during our life times….1 in 3!!! What are our chances of being diagnosed with other critical illnesses during this time? Of those Brits who don’t see the sense in critical illness cover, how many would willingly play the lottery if they were told that they had a 1 in 3 chance of winning?

The fact is that life assurance and critical illness cover should play a much bigger part in our financial planning but they don’t and lessons will have to be learnt. The obvious reason why a lot of people don’t opt for these types of cover is cost. What people fail to see though is that some cover is always better than none. If you have a mortgage for £100000 but can’t afford the premiums for the life and critical illness cover for the full amount then buy cover for whatever you can afford. With a bit of luck it will be a complete waste of money but at least you will have had some peace of mind.