What insurances to take out

jojaca

Can anyone give a little advice on insurances because i have appointment tomorrow to sort it out. I hate paying insurances.

I have had bid accepted on house and getting read to move anytime soon. Im 34 and have 23 year mortgage.

The insurances i have to see about is buildings/contents, Life/Critical Illness and Payment Protection. I know i have to do buildings insurance. Can i have advice on the rest.

Prothet_of_Doom

Buying ? You obviously need Building.
Own anything of value ? If you don't as soon as you start buying furniture it soon adds up (I reckon £70K worth in my 3 bed house) so yes contents.
Life cover ? Is anyone else moving in with you that would be homeless if you died ? If not why bother ?
CRitical Illness ? Well if you couldn't work how would you pay the interest ? But note that so much small print it's easy to miss-buy
Payment protection ? ditto All those PPI Claims. Read and read again the small print.

ACG

Buildings insurance is a must. Everything else is optional.
Contents insurance - self explanatory.
Life Insurance - pays out a lump sum if you die. If your a single person with no dependents then is arguable whether there is any need for this or not.
Critical Illness - pays out a lump sum if you were to have a heart attack, cancer etc in line with the policy conditions. This can be for the mortgage amount or more or less - depending on budget and requirements.

Income Protection - comes in 2 forms, long term and short term. Short term pays out for 12-24 months maximum, long term will pay out until the end of the policy/you return to work/your retirement - whichever is soonest.

For me income protection (long term) should be a priority for the majority of people. If your too ill to work, how on earth are you going to pay your mortgage/sky/car/etc etc?

I have a client at the minute who is self employed and refused income protection and critical illness cover - recently had a heart attack and now hes struggling. He cant afford to not work, but because he hasnt taken time off to recover hes struggling to work... it wouldnt surprise me if he had another if im being honest all because he wouldnt put £30 a month into a policy when he could afford it.

Some people say they get sick pay from work... great, but what happens if the employer pulls that benefit or your need longer than 6-12 months off? The average claim on income protection is around 6-7 years....

Hopefully that helps. Dont feel pressured into anything its pretty much all optional. Nobody likes paying for insurance but if you make a claim you will be very happy that you did.

amnblog

ACG wrote: »

Buildings insurance is a must. Everything else is optional.


I have a client at the minute who is self employed and refused income protection and critical illness cover - recently had a heart attack and now hes struggling. He cant afford to not work, but because he hasnt taken time off to recover hes struggling to work... it wouldnt surprise me if he had another if im being honest all because he wouldnt put £30 a month into a policy when he could afford it.

ACG's story proves that insurance is anything but 'optional' if you are sensible.

jojaca

Cheers for information, I just found out that if i die whilst in current job my partner will recieve 3 x Annual Salary. So i won't bother with life insurance.

opinions4u

jojaca wrote: »

Cheers for information, I just found out that if i die whilst in current job my partner will recieve 3 x Annual Salary. So i won't bother with life insurance.

False economy.

magpiecottage

opinions4u wrote: »

False economy.

Absolutely because if you lose your job it is no longer available - and if your health has deteriorated in the meantime it could be irreplaceable just when you need it most.

R_P_W

If a partner will be effected then take out life insurance for a few extra quid a month! And if you don't die and have to claim - well look at that as a bonus

jamesd

Income protection cover is probably both most expensive and most valuable: you have to carry on living through whatever it is that is preventing you from working. But you probably don't need full income and can reduce the cost by delaying the start of payments. Perhaps 50% of income with a one year delay to cut the cost. Comes in versions where you have to accept any work, or more costly versions where you only have to be unable to do your own normal job.

Life assurance value needed depends on the needs of the person who will get the payout. Three times pay would produce an ongoing income from investments of about one seventh of your pay. Probably not going to be enough.

Critical illness insurance can help you live with a serious condition or help to pay for treatment.

jojaca

I am even more confused, after reading comments. This is my situation, I have 23 year mortgage (£325 a month Fixed for 5 years) and i still have savings of £5k/6k.
I was planning to save minimum of £400 of month for raining day to cover illness in future. Also my partner wants to go back to work.

magpiecottage

jamesd wrote: »

Critical illness insurance can help you live with a serious condition or help to pay for treatment.

But only if you are "lucky" enough to have a qualifying condition, not something that looks like it but isn't or is not bad enough.