Critical Illness insurance, MPPI, or long term income protection?

DepositSaver

Or something else???
I am in the process of buying my first home and am somewhat confused about life, illness and income insurance.

I have worked in the NHS for almost 15 years so if made redundant should get a decent enough payout, so don't think I really need unemployment cover. I get 6 months full sick pay and 6 months half pay, so not sure that short term payment protection is necessary. I am single with no dependents and so don't think I need life cover.

My broker suggested I look at critical illness insurance, but I have read mixed opinions on this - Martin Lewis seems to be very against it, but other sites seem to suggest it could be worth getting. In doing some research I came across long term income protection (though haven't looked at in detail), and wondered if this would be worth getting???

I am unlikely to ever have enough savings to pay off the mortgage outright (until I get close to the end of the term), but will be saving regularly and would hope in 3 or 4 years to have enough saved to live on for a few months.

I am aware that advice can't be given here, but some thoughts and opinions on the various types of insurance would be good.

Thank you

dunstonh

Critical Illness insurance, MPPI, or long term income protection?

All three are different and cover different areas. Indeed, you can have all three without any overlap.

I have worked in the NHS for almost 15 years so if made redundant should get a decent enough payout, so don't think I really need unemployment cover. I get 6 months full sick pay and 6 months half pay, so not sure that short term payment protection is necessary.

So, MPPI would have significant overlap and basically be a waste of money.

I am single with no dependents and so don't think I need life cover.

correct.

My broker suggested I look at critical illness insurance, but I have read mixed opinions on this - Martin Lewis seems to be very against it,

No-one really understands his stance on this. However, it is flawed thinking. You are statistically more likely to claim on a CI policy than life assurance. Most mortgage and financial advisers will tell you they see more CI claims than life assurance. Yet you dont see him being negative on life assurance.

Martin is not a qualified financial expert. So, its probably a lack of understanding in an area that he really doesnt get involved with. There may be historical issues as well as the media never used to like CI cover (it did have issues in the past) and remember that is he is journalist.

In doing some research I came across long term income protection (though haven't looked at in detail), and wondered if this would be worth getting???

PHI is a good product and covers your biggest asset. i.e. your lifetime income. People insure their phones, pets etc but so few seem to insure their income.

DepositSaver

Thanks for this, I'll go and do some further research into CI and PHI.

DepositSaver

Bumping this as I have more queries after doing some research.

I think I am erring towards PHI, which I would defer for either 6 or 12 months as I have decent sick pay at work. I would probably go for an own occupation policy.

I am stuck as to how much benefit per month I should go for. I know there is a max you can insure for (60% of the first £25000, then 50% of the rest in a policy I am looking at at the mo), but do most people actually go for the max? Or do I add up all my essential outgoings and go for that? A few websites have mentioned about allowing for getting state benefits on top - am I right in thinking that ESA is about £400 a month? So do I add up my outgoings then take away what I'd get in state benefits and go for that amount per month?

Thank you

ACG

DepositSaver wrote: »

My broker suggested I look at critical illness insurance, but I have read mixed opinions on this - Martin Lewis seems to be very against it,

Forget what Martin Lewis says. Half of what i see him say makes me wonder how he gets away with it.

If i went on the TV and said it i would probably lose my license - but hey ho.

Critical Illness pays out on around 90% of claims, infact someone on here around 2-3 days ago came and said they got a payout.

It pays out a lump sum, this allows you to make home improvements, pay for a carer or private treatment. You may not necessarily need it for your full mortgage but its always hand to have a lump sum payout when your not in the best of positions.

PHI/Long term income protection is a fantastic contract and i think the majority of people in the country should have it.

Im surpsied your broker is recommending CI over PHI but he knows more about you than we do on here.

DepositSaver

ACG wrote: »

Forget what Martin Lewis says. Half of what i see him say makes me wonder how he gets away with it.

If i went on the TV and said it i would probably lose my license - but hey ho.

Critical Illness pays out on around 90% of claims, infact someone on here around 2-3 days ago came and said they got a payout.

It pays out a lump sum, this allows you to make home improvements, pay for a carer or private treatment. You may not necessarily need it for your full mortgage but its always hand to have a lump sum payout when your not in the best of positions.

PHI/Long term income protection is a fantastic contract and i think the majority of people in the country should have it.

Im surpsied your broker is recommending CI over PHI but he knows more about you than we do on here.

The more I look at long term income protection, the more I think it is a really good idea. I just need to work out a balance between having sufficient cover and not paying really high premiums. I don't really know what state benefits I would be entitled to - I am aware of ESA, but is there anything else I would be entitled to if I were too ill/injured to work?