What more cover do I need on my life/health?

Sparky_Mike

Hi everyone,

I've been lurking on the site and reading up for a while. However I wouldn't mind if someone could advise me if I could do with any extras to my life cover.

I will be taking out a £50000 Level Term Assurance to pay off the morgage and to leave some extra for my partner from the Cavendish site.

I work for my Local Authority and will have full pay for 6 months and 1/2 pay for the following 6 months if I fall ill, it is unlikely I will be made unemployed and I will recieve 'Death-in-service' benefits as well if the worst happens.

Critical illness cover seems to be too specific to be usefull but if I couldn't work any more after the 12 months what would be the best cover? Some sort of Income Protection paying about £1000 a month and linked to inflation would be nice but only kicking in after 12 months. Also some sort of lump sum (about £20000 to £30000), again linked to inflation, to cover one-off payments that would pay out on any serious or critical illness that prevented me from working would be handy!

Am I living in a dreamworld here?

Thanks in advance,

Mike

dunstonh

if I couldn't work any more after the 12 months what would be the best cover? Some sort of Income Protection paying about £1000 a month and linked to inflation would be nice but only kicking in after 12 months.

Permanent health insurance is the policy in question.

Also some sort of lump sum (about £20000 to £30000), again linked to inflation, to cover one-off payments that would pay out on any serious or critical illness that prevented me from working would be handy!

RPI (or flat rate) increasing standalone critical illness policy would cover that.

Sparky_Mike

dunstonh wrote: »

Permanent health insurance is the policy in question.



RPI (or flat rate) increasing standalone critical illness policy would cover that.

Can you recommend a good PHI policy or should I go and look at confused.com etc.

As for the critical illness policies they seem to cover a limited range of illnesses, I'm looking for a very broad ranging cover that will pay out on most illnesses that prevent you from working again.

Thanks,

Mike

dunstonh

Can you recommend a good PHI policy or should I go and look at confused.com etc.

Its against board rules to recommend regulated financial services products and it would also put me in breach of FSA rules as well. You could look at confused.com but I doubt they would offer many.

PHI is low profit, high admin (mostly paper, not computer) and falls under both protection classification and investment classification. Most of these internet sites only hold protection licence and not investment licence so wouldnt be able to show a full range of PHI policies. Plus, many of the better providers have no online quote system so dont appear in the quote portals (not even those available to IFAs). There are also three levels of PHI (budget, standard and comprehensive) but there is no conforming to level and you wont find providers telling you which version of the plan is in which level. It can get a bit messy if you dont know what to look out for.

The internet quote portals seem to have very poor coverage on PHI for those reasons. They like to cherry pick the easy stuff and the profitable stuff and PHI doesnt really fit that. This is why you see mortgage payment protection all over the place as it is more profitable, its not personally underwritten and comes under general insurance classification.

As for the critical illness policies they seem to cover a limited range of illnesses, I'm looking for a very broad ranging cover that will pay out on most illnesses that prevent you from working again.

Govt doesn't allow people to be better off if ill and there is restrictions on how much you can be paid (with the exception of critical illness). So, any income related plan will provide and income and not lump sum.

Sparky_Mike

Thanks Donstonh, I guess it's all down to me researching now but thanks for pointing me in the right direction.

Cheers!

Mike

dunstonh

To help with your research, there are at least 41 mainstream products in the PHI class. So, in your research, if the site isnt returning at least 41 prices, then its not giving you full mainstream coverage.

Also, be wary of accident and sickness general insurance plans trying to pass themselves off as being income protection. They are the real budget options and often not worth the paper they are written on. I havent included any of those in the 41 but I do know a lot of internet sites list these in their "income protection" sections.