Do I have the right insurance?

jms2011

Hope someone can help as I'm a little unsure if I have the right kind of insurance (or even if I'm over-insured)...

I have a £135k mortgage and I live alone with no dependents.
I'm currently paying £64 per month for Mortgage Payment Protection Insurance which would pay out £800 per month should I become unemployed (30 day excess period) I'd like to keep this at £800.
In addition to this I am paying £43 per month for Life Insurance with Critical Illness Cover. So £107 per month in total.

Do I need both policies? Would some sort of combined policy be cheaper?

Finally, my employment status has recently changed from 'full time employee' to Company Director and part-owner of the business...would this effect my MPPI insurance? Obviously I'm not going to make myself redundant or fire myself, but if the company went bust then I'd be out of work...:(

Thanks for any advice...

InsideInsurance

You need to read the terms of the ASU/MPPI policy as some will exclude the "U" part if you are self employed or a company director.

I guess the question is most around the Life cover, if you say you have no partner/kids who are you intending to leave your worldly possessions to if you die? Are you worried about leaving them a significant sum? Are you planning to change you single/ no kids status or is that likely to continue?

jms2011

Thanks, I'll check the policy (when I find it) I'm happy to keep the life/illness cover, as my circumstances will change regarding family. I guess I was more questionning if I should be spending £64 per month on a policy that might not pay out, or if it would be more cost effective to have a combined policy (if this even exists?)

InsideInsurance

Long term insurance really isnt my areas of expertise but I havent heard of combined CI and ASU product.

Any policy "might not pay out" and the only part that is really under threat is the unemployment part. Certainly sickness and accident normally continue to give cover even to self employed people.

The you can buy explicit AS policies which may be worth checking, alternatively you could look at Permanent Health Insurance as the other form of income protection but this will almost certainly be more than your current ASU (rather than paying 12-24 months of payment PHI will pay through to your nominated retirement age)

Andy7856

If you live alone and have no financial dependants, then I would consider dropping the life cover. (who will benefit when you have passed away??)

dpac123

Life cover is not really necessary if you are single and have no dependants, but there are three factors to consider. 1. Are you likely to be single in the long term? If not then, it may be worth keeping the life cover, as it will probably be cheaper than if you apply again in the future because of age, health, etc. 2. Many life and critical illness combined policies work out cheaper than critical illness cover only. It is really worth checking the price of a standalone critical illness policy and comparing it to your existing policy. 3. You need to check whether your monthly premiums are guaranteed (don't increase over time) or reviewable (reviewed periodically and subject to increase). Only then can you really assess whether to lose the life cover element of your policy.