Income protwction insurance

kerensah

Hi
Do I need income protection insurance as well as life and critical illness cover (for my mortgage)? I was sold both by a mortgage broker on my first house years ago and now I'm a bit older and wiser I'm realising I probably don't need income protection?
Any advice would be much appreciated:)

csgohan4

depends on your circumstances and if you got a good deal at the time

BooJewels

Do you mean 'payment' protection? Mortgage policies often comprise 3 elements: life - critical illness - payment protection.

Life and critical illness usually pay a one-off lump sum if you either die or are diagnosed with a qualifying critical illness on their list. The third aspect, payment protection will pay an amount each month for a period of time (probably 12 months) that is equivalent to a percentage of your mortgage payment - ours at present is 133%. This pays out if you're unemployed or can't work through illness or are injured in an accident.

So each of the three elements has a different complimentary purpose and it depends on your circumstances as to which is appropriate for you. If you're in a safe job with good benefits you might not need payment protection etc.

csgohan4

BooJewels wrote: »

Do you mean 'payment' protection? Mortgage policies often comprise 3 elements: life - critical illness - payment protection.

Life and critical illness usually pay a one-off lump sum if you either die or are diagnosed with a qualifying critical illness on their list. The third aspect, payment protection will pay an amount each month for a period of time (probably 12 months) that is equivalent to a percentage of your mortgage payment - ours at present is 133%. This pays out if you're unemployed or can't work through illness or are injured in an accident.

So each of the three elements has a different complimentary purpose and it depends on your circumstances as to which is appropriate for you. If you're in a safe job with good benefits you might not need payment protection etc.

income protection can also be until your retirement date, again depends on your needs. It also can be about 60% of your gross income as well but obviously it becomes more expensive

ACG

If you mean income protection that will pay you an income if you are unable to work until a set period (usually either retirement or the end of your Mortgage), what makes you think you do not need it?

If you die, life insurance pays out. You stop being an expense (ie food, heating etc).
If you do not die but are unable to work, you might get a lump sum payout on critical illness, but what if you get an illness not covered by CI? You are still an expense. There is still a Mortgage to pay, there are still bills to pay.

Of all 3 policies, the only one I have is income protection (PHI).