Have I had another LBM?!!

Lizloz

Evening all!! I have already posted this in my DFW diary, but wanted to post on here as well as I don't get much of a response on there and wanted to share this with you all as it shows what doing your homework can really do:


"Dear Diary...omg, do I feel as sick as a parrot!...(why do we say that?!...have you ever known a sick parrot??...apart from the one on the Monty Python sketch?!).


Tonight, I have been looking in to what we (me and he) are paying out on insurances to cover our income should we go off work sick or lose our jobs.

What is happening is this - we pay most of our bills through MoneyWay who take a set amount off us each week, divvy it all up and pay who we want paying ie: council tax, Water, Gas, Electric, Loans etc etc but they also take a 'management fee' for doing so, plus an accidental death fee, plus insure my husband only incase he is off sick...... As of today (ie: with no mortgage going through this service, which will commence again in January), we are currently paying out £147.45/month or £34.03/week.....ouch!! When the mortgage gets added back on, I reckon this will go up to around £200/month...bigger ouch!! We also pay out another £65/month to another insurance company to cover more of his salary as the MoneyWay account does not cover the full amount of his salary and as he has a pre-existing condition, the chances of us being accepted with another insurance company, I would say, are slim, however, having read the T's & C's, we may be ok but I need to call to clarify.


I have been browsing t'interweb and have got some quotes from various providers, just out of curiosity really, and have been quoted £97/month to cover pretty much what we need to be covered against his salary alone...with all my workings out, we could potentially save (drrrrrum roll please...):
£143/month, £33.05/week!!


Add this to the savings I have already made over the last few weeks, we could potentially be saving:
£262.87/month
£60.66/week
£3154.44/year!!!!!!!!


How I wish I could swear on here right now but....holy freaking Joseph!!!!!!!! Why on earth I make it a habit to find this information out so late at night when I can't make any phone calls and I have to go to bed with all this information buzzing around in my brain, I do not know!!


I am dying to get on the phone in the morning, I really am!!


Oh my days....watching the clock is going to do nothing for me so I'm off.....watch this space, I will update ya'll tomorrow!!


TTFN!!"




Watch this space!!

sourcrates

Hi,

Why on earth are you paying someone to pay your bills ?

you can pay bills for free with a basic bank account with a direct debt facility.

Don't want to sound unkind but I can't understand why anyone would pay a "management fee" when they were already in debt ?

Do you really need this insurance ? Is it likley he may be made redundant ?
You could end up wasting a whole load of cash that would of come off your debt.

Lizloz

sourcrates wrote: »

Hi,

Why on earth are you paying someone to pay your bills ?

Have you not heard of a bank account with a direct debt facility ?

Don't want to sound facetious but I can't understand why anyone would do this ???

I hear ya, I really do and yes it does seem crazy but when we started out with this facility a number of years ago...call it small minded, call it ignorance I have no idea, but to be perfectly honest with you, we didn't really 'get' that it was costing us soooo much money. My husband gets paid weekly, me monthly and as we were so carefree (and a bit careless hence the reason for being in this mess in the first place), we wanted to use these people to give us some peace of mind that we knew how much we had to pay out towards our bills, the rest was ours. We have been using this facility now (as I said) for a number of years and as our bills have increased, so has the fees towards what we were paying.


Anyway, it looks like we might be able to cancel it anyway, which is my next goal but I need to feel 100% confident that as a couple, we can trust ourselves to control our money so that we don't have to use this company any more.

Lizloz

Just saw your edited post....thank you for re-wording it, and it's not un-kind, I totally get what you're saying.


The biggest fee we're paying is to insure part of my husband's salary if he is off sick as he only gets SSP from work which would leave us right up the creek. The management fee, to be honest, is pennies (£4.80/week) so I'm not overly bothered by that right now, what I am bothered about is paying £239/month to cover part of his wages, when we could be paying £96/month to cover a hell of a lot more from another insurer (and yes, we do so very much need it!) so my goal tomorrow is to sort this out.


I'm quite lucky and get 6 months full pay if I'm off sick.

tiger_eyes

It's great you're cutting down costs and getting a better deal. That's what MSE is all about.

I do wonder how worthwhile income protection insurance is compared to paying into your own emergency fund. You're currently paying £239 a month in income protection insurance, so if you'd put that money aside for just the last two years, you'd have £5736. Alternatively, if it was paid monthly into a Santander 123 account paying 3% interest, I reckon you'd now have £6172 tucked away. That could sort you for quite a while if your husband did fall ill, plus you wouldn't have to fight an insurance company for a payout. And obviously, if your husband never fell ill, you'd still have the money. Just a quick thought.

sourcrates

I understand what your saying, it's just that we have a bit of a "thing" on MSE about fee charging companies, mostly for debt management plans, but anything really, we don't like em, as they take advantage of people at there most vulnerable, and there is always a free alternative available.

Anyway, good luck at getting the insurance premium down, always pays to shop around !!!

sourcrates

tiger_eyes wrote: »

It's great you're cutting down costs and getting a better deal. That's what MSE is all about.

I do wonder how worthwhile income protection insurance is compared to paying into your own emergency fund. You're currently paying £239 a month in income protection insurance, so if you'd put that money aside for just the last two years, you'd have £5736. Alternatively, if it was paid monthly into a Santander 123 account paying 3% interest, I reckon you'd now have £6172 tucked away. That could sort you for quite a while if your husband did fall ill, plus you wouldn't have to fight an insurance company for a payout. And obviously, if your husband never fell ill, you'd still have the money. Just a quick thought.

Excellent post tiger !!!!!

Brightspark87

Hi, depending on his conditions even for an income protection thats expensive - does the provider research the whole of the market? Im pretty sure that you should be looking more like £175 MAX a month.

stewby

If I may suggest something:

My OH and I have a joint bank account. We each pay in £1000 a month which covers all our monthly outgoing plus a bit extra for cars, insurances, etc.
We have our own accounts which we keep the leftover wages in and can spend as we wish. Although, we both pay for our own fuel and a set amount towards the food budget.

Why don't you have a look and see if this is something that could work for you. It is basically the same as what you are doing through the company (if I understand it right) but without the fees.

We are doing ours through s4nt4nd3r and they pay us a small amount for our bills. We earned almost £9 in the past month, just for paying our usual bills.
Not to mention that, because the money goes out of our seperate accounts on the 1st of every month and all our direct debits leave that joint account, there is no chance that we will miss any payments. Or run out of money.


It's just a suggestion but you might want to have a look into it. As others have said, that money could be coming off your debt instead.

Congratulations on your second LBM.

cybertortoise

I would definitely second paying the money you currently spend on insurance into a savings account. Imagine having £6000 in the bank and hubby's job is fine. Oh no the washing machine has died! You could just buy one for £300 without worry or hesitation.

If you are looking for an account that separates your bill money and spending money you could try Thinkmoney, they take your bill money out of your income and transfer the remainder to your card (but they have a monthly fee of £17.50) or open 2 basic accounts, one for income one for bills and transfer money between to cover bills etc but you'd have to keep on top of it in case you were short and got a charge.

Lizloz

Morning everyone and thank you for your responses! I will be making the phone call this afternoon to the secondary insurer that we use to see what they can come up with and then I will have one or two more calls to make before we make a decision.


I very much appreciate your suggestions and the support is most welcome to me and there are some suggestions that I had not thought about - at this moment in time, we would not feel confident enough to not have any type of insurance so we will (for the time being) continue to pay for a policy and we have had to use them in the past, most recently last year when he injured his foot and was off for a while - had we not had that insurance in place we would have been in so much trouble. I totally get that we could save the money ourselves and it does sicken me to look at the figures above to see how much money we would have had had we saved the money ourselves but would we have had it or would we have been naïve (or stupid?!) and thought that we would never be off sick for long periods and spent that money along with the rest of the money we've wasted in the past?? I don't know, we'll never know, the only thing we can do right now is just try and save as much money as we possibly can but cutting down our outgoings and finding a cheaper, alternative insurance policy is one of them.


I'll keep you posted later!