Are you protected?

[PokerBroker]

First things first, although I work in Mortgages/Insurance this is not about generating business but more market research.   The thread is inspired somewhat by the untimely death of a good friend of mine. 

A mate of mine from nursery was put to rest last week, he suffered a massive heart attack at the age of 33.   He left behind a wife and 3 year old kid, he had no protection.   He'd discussed it with me but then came to the conclusion that at that time it was a payment he couldn't justify, we were due to do a review at the end of July when his financial year ended. 

If you have any protection what do you have and why?

If you don't why not?

Previously, I'd touch on this with people when arranging a mortgage but would shy away if any resistance, going forward I think I need to make this a primary concern. 

[DungBeetle]

I've got about £400k of life insurance separate to the house.   Think anyone with a kid should have it if you are the main breadwinner as the premiums seem pretty insignificant to me.

Sorry to hear about your friend - his wife and kid must be crushed. 

[PokerBroker]

I've got about £400k of life insurance separate to the house.   Think anyone with a kid should have it if you are the main breadwinner as the premiums seem pretty insignificant to me.

Sorry to hear about your friend - his wife and kid must be crushed. 

Everyone was crushed.  His wee laddie doesn't understand yet, but he now has about 200 step-uncles! 

[Longines]

Mortgage covered plus about six years net income through death in service benefit. I was surprised to find out last week that the latter counts towards my lifetime pension allowance, got some planning to do about that one.

[EvilPie]

I've got a £300k life insurance policy which costs £21/month

I don't have any kids or other dependants but the money is intended to pay off all my debts and leave my sister with my house and a few quid if anything should happen to me. The policy is placed in trust for IHT purposes and also so that it pays out pretty much instantly on death without having to go through all the probate hassle.

Terrible thing that happened to your friend. Really can't believe that he wouldn't have some form of cover because he couldn't justify the payment. Then again it's the people who need insurance the most that tend to be the ones who can't afford it

[BorntoBubble]

I dont but i dont have a mrs or kids. If i did I would get some to cover my income/mortgage.

[acegooner]

Mortgage covered plus about six years net income through death in service benefit. I was surprised to find out last week that the latter counts towards my lifetime pension allowance, got some planning to do about that one.

Indeed Death in Service benefit is approved under the same tax legislation as pensions with regards to the Lifetime Allowance. For higher earners and now even modest earners the reduction in the lifetime allowance is a headache that can mean their combined pension pots and life cover exceed the LA.

There is an alternative insurance product called Relevant Life Insurance, which is similar to Death in Service cover but does not form part of the Lifetime Allowance. A good IFA will be in a position to explain/advise in more detail.

[Eso Kral]

We have life insurance to cover us for the 2 mortgages we have and then also a critical illness policy for me and then we took out family income benefit for each child to the tune of £25k per child up until they would turn 21 which pays out the level sum each year on the anniversary of one or both of our deaths and basically means whoever would be looking after our children should we both pass at the same time but if we passed when Max was say 19 it would only pay for 2 years in his case and 4 in Ivy's but doesnt financially burden who we have decided would look after the children in this event and also means if something happened to just one of us the other would be mortgage free and have an amount of money that doesnt put pressure on them without changing the kids lifestyle.

[EvilPie]

We have life insurance to cover us for the 2 mortgages we have and then also a critical illness policy for me and then we took out family income benefit for each child to the tune of £25k per child up until they would turn 21 which pays out the level sum each year on the anniversary of one or both of our deaths and basically means whoever would be looking after our children should we both pass at the same time but if we passed when Max was say 19 it would only pay for 2 years in his case and 4 in Ivy's but doesnt financially burden who we have decided would look after the children in this event and also means if something happened to just one of us the other would be mortgage free and have an amount of money that doesnt put pressure on them without changing the kids lifestyle.

I'm never too sure about the critical illness policies these days. Years ago they were brilliant but then there were a lot of people who got paid and didn't die which the insurers obviously didn't like. It was almost worth having a ball lopped off or a slightly dicky ticker to get your mortgage paid off.....

These days from what I can see it has to be absolute curtains or you don't get paid in which case I can't understand the increased premium they command. Yes it gives you security in your final few months but you wouldn't want to go blowing the lot in your final days and then leave the family skint anyway.

[Jon MW]

At the moment I've got nothing - but I'm getting married next year and I had already decided that would be a good point to look at everything and decide what we need going forward.

[Eso Kral]

We have life insurance to cover us for the 2 mortgages we have and then also a critical illness policy for me and then we took out family income benefit for each child to the tune of £25k per child up until they would turn 21 which pays out the level sum each year on the anniversary of one or both of our deaths and basically means whoever would be looking after our children should we both pass at the same time but if we passed when Max was say 19 it would only pay for 2 years in his case and 4 in Ivy's but doesnt financially burden who we have decided would look after the children in this event and also means if something happened to just one of us the other would be mortgage free and have an amount of money that doesnt put pressure on them without changing the kids lifestyle.

I'm never too sure about the critical illness policies these days. Years ago they were brilliant but then there were a lot of people who got paid and didn't die which the insurers obviously didn't like. It was almost worth having a ball lopped off or a slightly dicky ticker to get your mortgage paid off.....

These days from what I can see it has to be absolute curtains or you don't get paid in which case I can't understand the increased premium they command. Yes it gives you security in your final few months but you wouldn't want to go blowing the lot in your final days and then leave the family skint anyway.

Actually when I read back my post I realized it wasn't critical illness but Income replacement that we had got for me as I am the main breadwinner and from what my adviser said was better for the reasons you state than a critical illness policy.

[DungBeetle]

We have life insurance to cover us for the 2 mortgages we have and then also a critical illness policy for me and then we took out family income benefit for each child to the tune of £25k per child up until they would turn 21 which pays out the level sum each year on the anniversary of one or both of our deaths and basically means whoever would be looking after our children should we both pass at the same time but if we passed when Max was say 19 it would only pay for 2 years in his case and 4 in Ivy's but doesnt financially burden who we have decided would look after the children in this event and also means if something happened to just one of us the other would be mortgage free and have an amount of money that doesnt put pressure on them without changing the kids lifestyle.

I'm never too sure about the critical illness policies these days. Years ago they were brilliant but then there were a lot of people who got paid and didn't die which the insurers obviously didn't like. It was almost worth having a ball lopped off or a slightly dicky ticker to get your mortgage paid off.....

These days from what I can see it has to be absolute curtains or you don't get paid in which case I can't understand the increased premium they command. Yes it gives you security in your final few months but you wouldn't want to go blowing the lot in your final days and then leave the family skint anyway.

Not sure this is true.  My mum got diagnosed with breast cancer a couple of year back - big operation and then given all clear.  Insurance company paid out with no arguments at all and the money put her mind at rest during the long post operation recovery period.

She had the policy for about 20 years though, so maybe newer polices aren't as good.

[PokerBroker]

Some of the older policies are better in terms of critical illness, the newer ones are more stringent simply because people live now after events that would previously have been considered a death sentence.   

Some good responses and I am glad people see the need for protection. 

Believe it or not, I don't but after last week I am in the process of getting it all sorted, for me it was never about cost, I just thought I was too young to consider it.  I though when I hit 40 that would be the right time. 

[Woodsey]

Think I get 3 years my salary from work insurance scheme, but I should check....

[vegaslover]

Cheers guys. This thread has reminded me to sort mine out now i'm no longer employed.

We had critical illness cover when we first got a mortgage but scrapped it. Similar to reasons above, unless you actually croak it they don't pay out and the restrictions of current illnesses make it very hard to actually be covered.