Income Protection or?

Pepperoni

Hi,


Husband & I both have life insurance (outstanding mortgage + 10y of salary). I have income protection through work, which pays 50% of salary after 13w to retirement age / death if I fall ill.



We have x2 young children and I'm just looking at how we can best protect ourselves. From what I have looked at, it would be best for H to get income protection covering accident and sickness.


Is that right? Then we would both just have life insurance and income protection for accident & sickness? Should we consider anything else?

Weighty1

I'd consider critical illness as well. If it's within budget to cover the full mortgage, then great, if not then take a lesser amount.

The way I explain it to my clients is this, "if your husband was critically ill but you need both your incomes to survive would you rather have a payout that would enable you to take unpaid leave to care for him OR would you rather still go to work to earn your income?"

Plus, critical illness can be extremely useful to pay for things like specialist equipment in the home, adapted beds or bathroom or building a downstairs extension with a wetroom and bedroom. Whilst having an income is great an income protection plan wouldn't provide the cash lump sum needed for some of these things. That's why in an ideal world clients would have both income protection AND critical illness cover.

Pepperoni

Thanks Weight, that's really useful.

Pepperoni

I guess we need income protection that has a claim which lasts until retirement age? Can't find anywhere that does critical illness on it's own, so guess we will have to phone our life insurance providers for a quote for that.

Weighty1

Pepperoni wrote: »

I guess we need income protection that has a claim which lasts until retirement age? Can't find anywhere that does critical illness on it's own, so guess we will have to phone our life insurance providers for a quote for that.

Lots of providers do standalone critical illness, however, the cost is often negligible to include life insurance alongside it. For example, I ran a quote early and the premium was 53p more expensive to add life insurance on to the critical illness. Since most critical illness plans require you to live between 10-14 days after a critical illness diagnosis I'd generally say it makes a lot of sense to add the life cover on for such a small additional cost. You'd kick yourself if either of you had a heart attack and died after 8-days but hadn't included the life insurance.

There's a big difference in quality between critical illness plans so don't presume your life insurance provider offer a comprehensive plan. I'd recommend speaking to an independent adviser who can recommend the best option between comprehension and cost.

FIRSTTIMER

go through money world, calculators online. I find them faultless. Took both Life with CIC and IP with L&G with them fixed until 65/70