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  • FIRST POST
    • Time Waits
    • By Time Waits 17th Apr 17, 6:54 PM
    • 1Posts
    • 0Thanks
    Time Waits
    Lifestyle protection for a single homeowner with no dependants
    • #1
    • 17th Apr 17, 6:54 PM
    Lifestyle protection for a single homeowner with no dependants 17th Apr 17 at 6:54 PM
    Hello everyone,

    I am a single mortgaged homeowner in my 20s. I have no dependents. What kind of financial products exist that can protect my home and/or lifestyle in the event I were unable to work?

    I think life insurance requires you to actually die, critical illness cover is woefully uncomprehensive* and payment protection insurance only covers your mortgage.

    Is the above correct? Is there a different product that can provide some form of lifestyle protection?

    ---
    * Quote from this site: /insurance/cheap-life-insurance (as a new user I can't post this as a link)
    We're not big fans of critical illness insurance. Many believe they will pay out if you get ANY serious illness and can't work. Yet that isn't true...
    ... Picking a good critical or serious illness policy would take a doctor and financial nerd combined
Page 1
    • FIRSTTIMER
    • By FIRSTTIMER 17th Apr 17, 7:12 PM
    • 223 Posts
    • 44 Thanks
    FIRSTTIMER
    • #2
    • 17th Apr 17, 7:12 PM
    • #2
    • 17th Apr 17, 7:12 PM
    Interested to hear responses as I am in exactly same position....I have 6 months full sick pay but that's about it.....I will have an emergency fund, but I was tempted to take out twelve month income protection but people have advised against it for the shear fact I have a generous sick pay allowance.


    Another friend quite rightly said that I would be soo driven to find any job, which is what you need to do throughout the claim period that I would end up in a job by the time the first pay-out arrived.!


    I have ;
    - Emergency Fund
    - Life Cover with CIC for Level Sum fixed premiums until aged 70.
    - Pension Plan which included life cover again.
    Last edited by FIRSTTIMER; 17-04-2017 at 7:15 PM.
    Savings £17500
    • dunstonh
    • By dunstonh 17th Apr 17, 7:40 PM
    • 87,311 Posts
    • 52,479 Thanks
    dunstonh
    • #3
    • 17th Apr 17, 7:40 PM
    • #3
    • 17th Apr 17, 7:40 PM
    I think life insurance requires you to actually die, critical illness cover is woefully uncomprehensive* and payment protection insurance only covers your mortgage.
    You do not need life assurance if you have no financial dependants.
    CIC is actually a viable option but secondary to permanent health insurance (PHI).
    PPI is not great but can be viable for some people depending on their occupation.

    * Quote from this site: /insurance/cheap-life-insurance (as a new user I can't post this as a link)
    Quote:
    We're not big fans of critical illness insurance. Many believe they will pay out if you get ANY serious illness and can't work. Yet that isn't true...
    ... Picking a good critical or serious illness policy would take a doctor and financial nerd combined
    If they are not capable then they should not be trading in that market (perhaps they are not which is why they say that.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • lisyloo
    • By lisyloo 17th Apr 17, 10:26 PM
    • 20,980 Posts
    • 9,994 Thanks
    lisyloo
    • #4
    • 17th Apr 17, 10:26 PM
    • #4
    • 17th Apr 17, 10:26 PM
    Personally I think critical illness is not that useful.
    It only covers certain illnesses and gives you a lump sum, which may be useful for altering your home or getting treatment but won't provide an income long term.

    PHI gives you an income (until death, retirement or recovery) if you are unable to work (in some cases your trade, in other cases if you can't do ANY work). This is much more useful in my opinion but be careful of the any job option - if you are a solicitor you might not want to work on a supermarket checkout so you may wish to get cover for not being about to do your own trade.

    Redundancy cover is another one worth considering if you are relying on one income, but depends on your trade. I've never been out of work for long, but depends on how flexible you are and of course where you live.
    Last edited by lisyloo; 17-04-2017 at 10:28 PM.
    • Weighty1
    • By Weighty1 18th Apr 17, 10:32 AM
    • 137 Posts
    • 50 Thanks
    Weighty1
    • #5
    • 18th Apr 17, 10:32 AM
    • #5
    • 18th Apr 17, 10:32 AM
    I'd disagree with Lisyloo in that I DO think critical illness is very useful and in some instances can be a better purchase than long term income protection.

    Imagine the scenario were you are diagnosed with a heart attack or cancer. With a heart attack you could be back at work within a month and with cancer you'd probably expect to be back within 12-months. Depending on any sick pay benefits you receive from work you may only experience a small/short term loss of income yet could have had your entire mortgage paid off. Having income protection may mean that you only receive an income from the plan for a few months. Whilst that's great in terms of financial protection you'd probably have wished that you'd have taken out critical illness cover. On the flip side, if you were to be diagnosed with MS and never work again then you'd probably have wished you'd have taken income protection.

    If you knew what condition you were going to be diagnosed with them it'd make it easier to make that choice. Around 70-75% of all claims are due to cancer and heart attacks so that *may* give some indication as which is the better option. Personally, I've got income protection and critical illness and if I was to only have 1 of them it would be the income protection but you certainly can't undervalue either option.
    • ThePants999
    • By ThePants999 18th Apr 17, 3:01 PM
    • 578 Posts
    • 616 Thanks
    ThePants999
    • #6
    • 18th Apr 17, 3:01 PM
    • #6
    • 18th Apr 17, 3:01 PM
    Income protection is what you're after based on what you've said. However, you'll be unable to insure your entire income. Insurers want to make sure there's an incentive for you to get back on your feet rather than permanently rely on the insurance money, so you'll typically only be able to insure about half of your income.
    • agrinnall
    • By agrinnall 18th Apr 17, 3:58 PM
    • 17,261 Posts
    • 12,932 Thanks
    agrinnall
    • #7
    • 18th Apr 17, 3:58 PM
    • #7
    • 18th Apr 17, 3:58 PM

    If they are not capable then they should not be trading in that market (perhaps they are not which is why they say that.
    Originally posted by dunstonh
    I think it's probably a quote from something said by MSE, hence the OP referring to "this site".
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