Life Insurance Query??

Amanda666

Although I have been reading MSE for about six months this is my first post. I've done all the basic bits but now want to start on the hard stuff! I currently have a mortgage ( repayment ) and have a life insurance policy which I pay approx £30 per month. As I have no dependants and my company has a life insurance policy for me is this other one needed?? Is there something that I need to cover the mortgage payments if I can,t work?
I,ve read the site but can,t seem to understand what I need to do?
Thanks for your help in advance.
x

dunstonh

If no-one is finanancially worse off in the event of your death, then there is no need for life cover.

There is permenent health insurance (PHI for short) but also known as income protection which covers long term illness and pays out an amount until the maturity date (which can be retirement or mortgage expiry or really anything you choose). There is accident, sickness and unemployment cover which also sometimes incorrectly gets called income protection. This usually pays out for 12 months although some will go for 24 months. Differences include the fact that it is a general insurance policy and not underwritten to your circumstances. This means it's easier to exclude you in a claim should you no longer meet their criteria. Plus they can change the criteria. That doesnt apply on PHI. Unemployment cover is included unlike a PHI. Both versions have variations of medical assessment in the event of claim. Some will go on the opinion of a doctor. Some will use the ability tests (can you walk up stairs, can you sit in a chair and get up again without using the arms etc.).

At the end of the day, if you have researched the information and still don't understand what is needed or what is available, then it may be prudent to seek advice from an IFA or a whole of market protection advisor.