first time buyer - life insurance or mortgage insurance?

earthlover

He is actually just about to start up a pension through work. They didn't do one until now. Not sure how good it is but I will ask him for info on that.

I suppose it could seem like a waste to take life insurance if there are no dependents. Will look for a good income protection.

Actually what is better income protection or critical illness in lkhis situation?

somethingcorporate

I'd go with income protection but it is probably considerably more expensive.

My wife and I have joint critical illness and death cover for £150k, costs us £27 per month.

We wanted income protection insurance for £1,500 a month (to cover one of the mortgages) and it costs upwards of £35pm and only lasts 12 months.

Still, income protection covers things like job loss etc but critical illness only pays out if you have an illness on the list.

ACG

Critical illness pays out a lump sum if you get one of the listed conditions (there are around 35 or so), which range from heart attack to cancer.

Income Protection will pay out a monthly figure upto around 60% of your pre-tax income. It will pay that until your retirement age or the end of the term (whichever is sooner).

As to which is better, theyre totally different so its difficult to answer. Personally i prefer to have the security of knowing it will pay out if i become too ill to work. Critical illness doesnt offer me that protection, iy does however give a lump sum should you need care or to make home improvements (wheel chair access, stair lifts etc), which income protection possibly wouldnt cover.

weighty1_2

ACG wrote: »

Personally i prefer to have the security of knowing it will pay out if i become too ill to work. Critical illness doesnt offer me that protection.

Bingo!

A severe bad back can be just as financially devastating as paralysis if the sufferer is unable to work and generate an income that is why, in my mind, income protection (PHI) is the most valuable of all products, because it covers the widest range of situations leading to incapacity.

Personally, I have life, critical illness and income protection, however, I'd feel extremely exposed if I didn't have the income protection but not exposed at all without the critical illness.

earthlover

I suppose it also depends how much your income is as to how much you need income protection. He is going to have friends paying rent to pay most of his mortgage, and his own income is not that much. So it may not be worth the expense of that either. OK, when someone leaves he is at risk, but we think he could soon get someone else to move in. So maybe he doesn't need any insurance?

earthlover

I heard on the news that insurance is going up soon because of the EU wanting to make things more equal between males and females, so maybe now is a good time to take out life insurance or any other for that matter?

kingstreet

Gender neutral pricing starts on 21 December and will see the premiums for insurances for young women rise. In addition, in January, the tax status of life assurance companies changes and this may impact future premiums.