First-time buyer: what insurance needed over what I've got?

bournejason7629

Am about to go into the world of home ownership, and being the only one working out of myself and my partner, I know that I need some protection incase anything should happen.

My mortgage repayment will be around £520 (£105,000 borrowed) and I have some income protection and insurance through work, which are shown below:
Critical illness cover: £30,000
Life assurance: 4 x salary (120,000 gross)
Group income protection: 60% to 52 weeks, then dropping to 50% of salary
Accident insurance: 4 x salary

What I'm wondering is what additional insurance you'd recommend. I'm thinking some sort of insurance covering me in case of being made unemployed, but should I also be looking at PHI?

Looking after myself but mainly I want to make sure my wife gets taken care of (as in looked after, not assassinated!) should anything happen to me. Any thoughts would be greatly appreciated.

InsideInsurance

Speak to an IFA or Protection Broker.

I know PHI isnt taxed but from memory Group IP is (dont want to be quoted on that). You could potentially get a PHI policy to top up the Group IP but the total paid out across the two will be limited.

Unemployment insurance generally only covers involuntary redundancy, a few better ones will also cover dismissal for anything other than gross misconduct but I believe these are fairly rare now. How secure you are in job/ employer will guide you on if you think you are at risk of this.

Additional Life cover would certainly be another consideration. At present, given she doesnt work, she'd get enough to pay off the mortgage but only £15k to live on after that. That may be enough as you think she should get out to work if you were to die or perhaps your one of the ones that dont care. Many would want to leave a couple of years income at least to give time to adjust to the new world without you.

bournejason7629

Had a bit of a look at my work benefits and I could increase the following:
Critical illness cover: £30,000 -> £50,000
Life assurance: 4 x salary (£120,000 gross) -> 5 x salary (£150,000)
Group income protection: 60% to 52 weeks, then dropping to 50% of salary -> 75%
Accident insurance: 4 x salary for accidental bodily injury resulting in permanent disablement (could increase up to £250,000 covering up to a wider range of events)

Wondering if I'm still going to want to look for some PHI/IPI incase something happens and I'm unable to work. Also some more life insurance to top up the lump sum going to my spouse in case of my death.

Gonzo33

Just so you are aware Life Assurance through work is not a guaranteed pay out because it has to go through the trustee's to see if there is enough money in the pot to pay out what your estate is technically 'owed' so getting an independent life policy to repay the mortgage is probably a good idea. For life it doesn't have to be all singing all dancing just get a quote from an advisor or comparison site and go with it. Just bear in mind you want a guaranteed premium and you need to ensure that the life policy finishes at the same time as your mortgage, or after.

You can get top up's for IPB (Income Protection).

bournejason7629

Thanks for your thoughts. I will most likely look at getting an independent life assurance policy that ends age 65.

Clive_Woody

soldave wrote: »

Am about to go into the world of home ownership, and being the only one working out of myself and my partner, I know that I need some protection incase anything should happen.

My mortgage repayment will be around £520 (£105,000 borrowed) and I have some income protection and insurance through work, which are shown below:
Critical illness cover: £30,000
Life assurance: 4 x salary (120,000 gross)
Group income protection: 60% to 52 weeks, then dropping to 50% of salary
Accident insurance: 4 x salary

What I'm wondering is what additional insurance you'd recommend. I'm thinking some sort of insurance covering me in case of being made unemployed, but should I also be looking at PHI?

Looking after myself but mainly I want to make sure my wife gets taken care of (as in looked after, not assassinated!) should anything happen to me. Any thoughts would be greatly appreciated.

I assume that you have sorted out buildings (at a minimum) and ideally contents insurance too? :beer:

bournejason7629

Clive_Woody wrote: »

I assume that you have sorted out buildings (at a minimum) and ideally contents insurance too? :beer:

That's being quoted and will most definitely be in place when contracts are exchanged :-)