Which insurance am I looking for?

B'stard

I want to take out insurance which will protect me in case I retire early or am too ill to work. I have xxxxx so I know that that will not be covered on critical illness, but maybe income protection? But hopefully they will insure me for anything else which is not caused by having xxxxx.

I'm a bit confused with all the terminology being used - Level term assurance, Decreasing term assurance etc

I am not bothered about providing for anyone due to my death, my son does not live with me, and I suppose the house will be sold to provide for his future.

lisyloo

You won't find a policy that covers you for retiring early voluntarily.
If you want to do that you need to invest in your own pension or other retirement savings.

Level term and decreasing term is for life assurance i.e. if you die.
Decreasing term is used for repayment mortgages because the amount that's paid out decreases as the mortgage decreases during the term when you are repaying it.
Level gives a fixed amount.

I think you are talking about PHI (permanent health insurance).
This would cover you if were off sick for a long period and covers you until retirement (when your pension kicks in).

A few things to be aware of

1) Your MS and any complications from it would be probably excluded but as you say anything completely unrelated would be covered.

2) There is a deferred period when it doesn't pay out because they don't want to pay out for say a bout of flu. You could line this up with your sick pay e.g. if your employer gives you full pay for 6 months then you could make the deferred period for 6 months. The longer the period the cheaper the premiums, so don't make it too short. You could even consider living off savings for a while but that's up to you. That's a balance between price and cover.

3) Some policies cover YOUR job, some policies cover ANY job. Make sure you get one that covers you if you can't do YOUR job e.g. so they wouldn't for example expect you to stack shelves if you've lost your memory and can't be a solicitor any more.

B'stard

Thanks for your reply.

I get paid 6 months full/6 months half sick pay, I'm just a bit apprehensive that I may not not be able to pay the mortgage etc if I was forced to retire early on medical grounds or I was off work for over 12 months.

I have a company pension so I assume if I have to retire on medical grounds it will be fully paid out, lump sum etc even though I am only in my late 30's with 15 years of pension payments.

As I said I'm not bothered about providing for anyone once I die, there will be enough equity in the house to pay the outstanding balance and leave a decent sum for my son.

So can I just be insured for PHI?

magpiecottage

Yes you can get standalone PHI.

It can also have a waiting period so it takes over when your work benefits stop.

Speak to an Independent Financial Adviser.

One other thing - at the end, you will reach a point where the policy will expire before any benefit becomes payable, so cancel the Direct Debit then!

lisyloo

I have a company pension so I assume if I have to retire on medical grounds it will be fully paid out, lump sum etc even though I am only in my late 30's with 15 years of pension payments.

I would check that out.
I'm not sure it would pay out and even if it did, the payout could be quite low.

You also could be off sick for a long period instead of permanently.

Yes you can get standalone PHI.

dunstonh

I have a company pension so I assume if I have to retire on medical grounds it will be fully paid out, lump sum etc even though I am only in my late 30's with 15 years of pension payments.

An assumption that is usually wrong. You should check that as lisyloo says.