Income protection - not sure whether to get it?

Help1234 · 13 November 2017 at 12:29PM

Hello,

Me and my partner are first-time buyers. My boyfriend works in the public sector and his salary is around £27,000 per annum. I've asked him to clarify with HR what his sick pay policy is and we are waiting for a response.
I'm a PhD student.

Our mortgage payments are going to be £521 per month over 35 years.

A protection consultant has recommended we take out income protection and we are unsure whether or not to do this. It would only cover my partner and not me. I was told I am not eligible due to being a PhD student. Can anyone advise? We were offered the following:

Cover: £6,000.00 each year
The amount of this cover will increase each year. We will pay this in regular monthly payments.
Term of cover: 35 years
Monthly premium: £31.66

More information about your Income Protection premium
● This premium is guaranteed, which means it won't change during the term of the cover (other than for yearly increases to your cover or unless we need to make changes in the circumstances shown in the plan details and key facts documents).
Additional features of your Income Protection
● The deferred period for this cover is 4 weeks. The 'deferred period' is explained in your plan details.
● This cover uses the own occupation definition of incapacity in the plan details.
● The amount of cover will increase by the Retail Price Index on every anniversary of the date the plan starts.
● The maximum amount we will pay is explained in the section ‘How much we will pay’ in your plan details.

Cover 2 Waiver of Premium (Sickness)
Term of cover: 35 years
Monthly premium: £1.89

More information about your Waiver of Premium (Sickness) premium
● This premium is guaranteed, which means it won't change during the term of the cover (other than for changes in line with changes to the total monthly premium you are protecting, or changes to the cover that you may choose).
Additional features of your Waiver of Premium (Sickness)
● The deferred period for this cover is 4 weeks. The 'deferred period' is explained in your plan details.
● This cover uses the own occupation definition of incapacity in the plan details.

Weighty1 · 13 November 2017 at 12:48PM

For most people their income underpins their whole lifestyle so on that basis it is often a good idea to have it.

It's important that your partner clarifies their sick pay entitlement as it wouldn't be possible for your boyfriend to claim on an income protection plan if they are still receiving sick pay from their employer. In my experience most people in the public sector receive up to 6-months full pay, 6-months half, depending on the length of service. Having a deferred period longer than 4-weeks would help to reduce the overall cost.

Help1234 · 13 November 2017 at 12:55PM

I am uncertain because there is no mention of anything in his contract. I have also looked on the Council's website (he works for the Local Authority) and there is no mention of sickness policy on their page "The pay and benefits of working for us"

trailingspouse · 13 November 2017 at 2:22PM

Let's look at it another way - the cover is offering you £6000 per annum. That, frankly, is far too low to be of any practical use - it certainly won't help you to underpin 'your lifestyle'.

How long would it take you to save £6000? You can start with the £30+ per month you would be saving by not taking out the insurance... Do you think it's likely that your OH would lose his job during that period? So, say you could save £6000 in three years (that's £2000 a year, or less than £200 a month), and you think it's highly unlikely that your OH would lose his job during that period - you then have £6000 in the bank earning interest, which is available to you if he loses his job - and also if any other emergency comes along. Losing your job is only one of many things that could happen!

Presumably, following you PhD work, you will be looking for gainful employment. That will make the finance situation easier, and with some careful planning, should one of you lose your job, you can manage on a single income for long enough to find another one.

So, basically, I wouldn't bother. Protection consultants are paid to sell protection insurance - he's doing his job, just like any other sales person. That doesn't mean you have to buy.

kingstreet · 13 November 2017 at 2:57PM

Same thread on HBR&S;-

http://forums.moneysavingexpert.com/showthread.php?t=5743353

Income protection - not sure whether to get it?

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