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More than half of homeowners under 40 don’t have Critical Illness Cover

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Written by: Paloma Kubiak
29/09/2016
A surprising number of people under the age of 40 who have a mortgage don’t have Critical Illness Cover and many don’t know what it is.

The Mortgage Advice Bureau (MAB) found that 52% of homeowners aged 18-40 do not have Critical Illness Cover (CIC) in place.

Its survey also revealed that more than a third (37%) thought that cover was too expensive, while 30% didn’t think they needed it.

The MAB said there was “an evident lack of awareness of CIC”, particularly with younger homeowners aged 18-24, as 42% didn’t know what it is.

Brian Murphy, head of lending at MAB, said: “As a society we don’t like to plan for the worst, and there’s a tendency for younger homeowners to stick their heads in the sand and hope for the best. Yet having a critical illness policy in place can take away the worry of how you would cope financially, giving you peace of mind should the worst happen.”

He said there’s also a preconception that cover can be costly, but in reality £75,000 of CIC for a non-smoker born in 1991 working in an office environment, would be £12.15 per month.

He explained that CIC is similar to Life Assurance but it pays out on diagnosis of certain illnesses, as opposed to only paying out on death so it’s not just for older people.

If you or your partner couldn’t work for six months or so owing to illness, the questions you need to ask are; could you afford to pay the mortgage? Would you be able to stay in your home?  See YourMoney.com’s Life insurance and critical illness cover: do I need both?

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