Got the mortgage - what protection?

everything

(Not sure if this is the right section, so apologies if not) So we got our mortgage offer through this morning :beer: but now I've started thinking about what protection we'll need, especially with our first child on the way.

My husband I are both full time teachers, both 28 years old and both pay into the TPS. Our sick pay entitlements are 6 months on full pay followed by 6 months on half pay.

I know our IFA will now be looking to sell us cover, and will most likely advise is on what cover is needed, but in any case I'd like to have other peoples' opinions and get as clued-up on it as possible.

Obviously, life insurance to cover the mortgage balance is a definite, but I'm just wondering what people's opinions on the other cover available (MPPI, critical illness cover, income protection) is?

Any advice appreciated!

GMS

Figure what would happen in the worst case scenario. Then look at what you can afford to protect.


All insurance is a waste of money until you need to use it at which point it I the best money ever spent.


I have had people who don't think they will die so refuse a £8 per month basic life cover. I phone on the desk happily insured at £10 per month because it will cost £500 to replace! Dog costing £15 per month to avoid a £500 vet bill.


Run through it all with your adviser and see what they recommend.

getmore4less

Look the cover you already have through work and make sure any death in service is outside your estate.

But that cover goes if you are out of work so some top up/replacement.

Worst case is usually one/both of you gets so ill you both can't work.

Also look at the cost of cover and how much that would reduce any debt if it was paid to the mortgage.

Depending on the place/space you have it may be a downsize is an option.

eg If you died would the OH with child still want to live there or maybe go back home.

it is very easy to over and under insure if not careful.

Another thing to consider is cover tends to get more expensive as you get older so if planning to upsize(wage increases/bigger mortgage house) at some point over insuring now ready for the bigger commitment may be worth considering.

amnblog

There are specialist products available designed for Teachers to fit around your occupational benefits.

Speak to a competent broker and they should be able to assist you.

wrkactjob

Don't forget to ask your colleagues too!

dimbo61

For life insurance go for Level term cover and not decreasing term cover.
Only pennies difference in the cost at 28 and you may remortgage/upsize a few times in next 20/25 years.

runmichellerun

I am in you exact situation OP. About to move and with first child on the way. Here's what I'm setting up...

A will
Income protection for me and OH
Family income benefit until child is 21
Mortgage protection insurance

Plus I will be doing all of this through a financial adviser

Hope that helps

getmore4less

runmichellerun wrote: »

I am in you exact situation OP. About to move and with first child on the way. Here's what I'm setting up...

A will
Income protection for me and OH
Family income benefit until child is 21
Mortgage protection insurance

Plus I will be doing all of this through a financial adviser

Hope that helps

It's the events they cover that is critical.
Looks like there may be overlap.


What events does the MPI cover that the IP won't cover?


How do you cover the one of you has to give up work because the other person gets ill(non terminal).


The FIB just leaves the person left high and dry if they have not been able to keep on working.


Why the FIB over a lump sum life cover policy that would make the other financially secure.

colin13

as someone wo did not take critical illness cover,nothing will happen to me,,then got diagnosed with MS,,big reget now,, had to give up work,,,

runmichellerun

getmore4less wrote: »

It's the events they cover that is critical.
Looks like there may be overlap.


What events does the MPI cover that the IP won't cover?


How do you cover the one of you has to give up work because the other person gets ill(non terminal).


The FIB just leaves the person left high and dry if they have not been able to keep on working.


Why the FIB over a lump sum life cover policy that would make the other financially secure.

I don't 100% understand what you've written here! but I shall explain my thinking...

Mortgage protection cover will pay a lump sum should someone die, which covers JUST the mortgage. MPPI covers just the mortgage repayments, not any other bills for up to 2 years in case of accident, sickness or unemployment.

Income protection cover replaces income should someone be ill and unable to work until they retire. Could look at ASU instead depending on redundancy packages etc.

Family income benefit provides an income for the child until they are an adult and would mean someone does not have to give up work as the deceased persons income would still come in. This is NOT until your retirement, or the end of mortgage term, but until the child has grown up.

I'm not saying there isn't some overlap, but benefit values can be reduced accordingly to ensure that we're not over insured.