Advice pls: Life Assurance with Critical Illness and Income Protection

emmasam

Hello Everyone! First post for me here and I'm hoping you can give me some of your excellent advice!

My husband and I started our own business about 12 months ago. We realise that we need to arrange various insurances etc in particular income protection for my husband in case he suffers an accident. He's the brains and I'm the bookkeeper so if he couldn't work for any reason our monthly income would be hit hard!

We've visited our Bank (with whom we have our personal accounts, business account, credit cards and loan) to discuss Life Assurance (linked to the mortgage) with Critical Illness cover for both of us and Income Protection Insurance for my husband only.

First and foremost I'm very wary that I have 'all my eggs in one basket' but the thought of shopping around for the various insurances we need independently scares me as I'm worried I'll end up woefully under insured (because I don't reall understand how they work). Would you suggest I visit an Independent Financial Advisor and are their services very expensive? We're a new business and wary of spending every penny. I've totted up the 'remuneration' that the Bank's advisor will be paid by the financial institution involved (I ASSUME this is commission?) and it amounts to some £5300!! for the three policies if we sign. My husband and I think the monthly premium is a bit on the high side too - £170 for the three? Should I shop around?? I've realised that if we pay the £170 for the 22 year term (till retirement) I'll have paid them £44,700 which equates to half of what we owe on our mortgage and we may never claim. Hopefully, we won't ever need to. :T

People say 'don't go to your Bank for advice as they're all tied' so any advice you could give me would be a massive help. I'm desperate. Thank you.

Wutang_2

IFA all the way!!!

lisyloo

Well one thing to establish is whether you bank are independent and search whole of market or whether they are "tied" which means they can only offer you their products which may not be the best ones for your circumstances.
If they were tied then they should have made it clear to you that they can only offer you their products.

In your posistion I think the best bet would be to get independent advice.
It costling you enough to spend some time over the decision.
An independent advisor shoudl be able to search the whole of the market and they may be better products out there for you, which might mean cheaper cost but might also mean better in terms of the coverage they offer.

The fess might seem high and I'm not trying to defend them but remeber they see a lot of people who won't take any products and they don't get paid, so there is a risk for them in spending hours offering free advice.

emmasam

Thank you both for your quick replies!

Better find myself and IFA pronto!

dunstonh

Would you suggest I visit an Independent Financial Advisor and are their services very expensive?

Yes and no.

I've totted up the 'remuneration' that the Bank's advisor will be paid by the financial institution involved (I ASSUME this is commission?) and it amounts to some £5300!!

Even if you go full commission with an IFA rather than fee basis, it should come in a lot cheaper than the bank. Its also possible the IFA will earn more due to the pecularities of different business models an the way commissions are declared. However, focus on the cost to you.