Life Insurance Help

keza

Hi guys, i really need some help.

I need to sort out life insurance for me and my husband as the future worries me and we are always so careful with money but i just want to make sure the other half will be ok if something happens to one of us.

Our circumstances are we have been married 6 months. the mortgage on our house is in husbands name as he brought the house while i was still living at home. I would not be able to get a mortgage myself as my credit report is still on the mend from years of credit abuse (cleared up in 2007)

I have no idea what im looking at with life insurance. do i need critical illness cover aswell or is it not worth it?

Any help appreciated!

kingstreet

You both need to sit down and think about the things that could go wrong that could cause you to lose your home;-

Death
Illness
Unemployment

then put them into order of priority. Once you've decided which ones are most important, set a budget you can afford to provide cover.

See an IFA, explain what you feel you want to look at now and ask them to build you a plan so you can address the less important issues later. Ask them to get the most comprehensive cover they can for you from the budget you set.

magpiecottage

You probably need a good IFA (not a multi tie).

There is a sort of pyramid which says you should first make sure you have a source of funds to deal with emergencies (my boiler died last month and I am so glad I had one!)

Then consider what happens if one or other of you die - not just the mortgage but how the surviving members of the family would live.

Then what happens if you fall ill.

Critical illness will pay a lump sum but only if you get exactly the condition specified in the policy - not one which looks like it or is not severe enough.

Permanent Health Insurance (as opposed to Payment Protection Insurance) will pay out the amount specified in the policy, subject to this not exceeding a specified percentage of your earnings before you fell ill. However, unlike earnings, you do not pay Income Tax or National Insurance on it (provided it is your own policy, not your employer's).

It also continues to pay until either you are well enough to start working again or you reach the point when the policy was due to end anyway. This is potentially far more than PPI which only pays up to one or two years. However, PPI can pay for unemployment and PHI does not.