PHI or Life with CI..?

ferry

Trying to work out what would be best for my family in our position.
My wife and I are both 37,N/s,boring office jobs and no history of health problems.
We have a straightforward repayment mortgage and 2 kids,...so pretty much Mr & Mrs average!but only a basic life with Terminal Illness policy at the moment which clearly needs upgrading to a better product.

What would we need to consider when deciding the purchase insurance protection for a family in our position?
Ideally the mortgage would need to be paid off,theres loads of equity so no real need for level term and payable on 1st death..?

What would be the kind of things to consider perhaps PHI over Life & CI or maybe vice-versa..?

Thanks for any ongoing advice..

Terry

silverfoxuk

Firstly I'd get together your monthly income/expenditure budget so you know what your monthly outgoings are. If you don't know what you spend every month, you're not going to know how much insurance you need.
Broad order of importance is:
1. Life insurance (lump sum to pay off debts incl. mortgage, loans etc)
2. Family Income Benefit (to pay an income to your family for so long as your spouse/children are dependent)
3. Income Protection/PHI (to pay you an income if you cannot carry out your own occupation due to illness or accident)
4. Critical Illness (to pay you a lump sum if you are diagnosed with one of the listed critical illnesses. Can be combined with life cover).
5. Accident, illness or Unemployment/Redundancy Cover. (Pays out but normally with restrictions/small print.
I think that's the general 'pecking order' (c)dunstonh . 1-3 could be considered 'catastrophe cover' ie without some form of life/income protection to cover your mortagage outgoings, loans, etc, your wife & kids could be left in a bad situation if you popped your clogs. 4-5 Less so, but very much personal choice and affordability. CI gives you some 'options' if you have a valid claim (like not having to go back to work after cancer treatment has finished) but some see it as a luxury. Sickness, unemployment/redundancy/payment protection very much last. Expensive for cover and often comes with many restrictions/small print so beware.
You can get some advice over the telephone from the likes of http://www.lifesearch.co.uk who (in my limited experience) are quite knowledgable on protection. You could visit an IFA. This is an area where it's useful to speak with someone who knows about protection products and how they work as they could save you money. For example with IP/PHI the deferrment period can dovetail in with when your employment sick pay benefit ends. The longer the defferement period, the cheaper the insurance etc.
Good luck!

ferry

Thanks very much for the detailed response:T

Terry.