Life insurance/critical illness cover

TIGASH

Hi all been a while since I've posted but can finally say I'm moving forward with my house purchase. 

Mortgage offer in, just awaiting exchange date from solicitors. 

I'm looking for some advice or opinions on life insurance/critical  illness cover.

For some context

Ftb with Mortgage of 79k (good deposit) now fixed for 5 years. 28 year Mortgage. Income on 17k yearly, no dependents and no plans to have. No current health issues, current job in a stable environment at the minute and with current employer 5 years.

Mortgage brooker says vital for life insurance (but isn't pushy). 

Any advice or opinions greatly received 

Thanks

user1977

Why does your mortgage broker think life insurance is "vital" if you have no dependants? It's a rather pointless waste of money (though I expect extra commission for the broker!). Critical illness cover might be more useful.

Slithery

What's the point of life insurance if you have no dependants? Critical illness cover may be a good idea though.

TIGASH

Thanks for your replies...maybe I've got the wording wrong...it could be critical illness cover that was vital and suggested that increasing to health insurance was a good idea. 

Hedgepigs

Permanent Health Insurance is probably what they were talking about. It pays out a set amount a month if you are unable to work for a period of time / length of policy due to ill health. Critical Illness Cover is similar, but only covers a very limited range of illness, whereas PHI should cover everything.

caprikid1

Why do people insure their house, insure their Car, their Pet but not the one thing that pays for it all ? Fit and well people get knocked over, have health issues.

What does your current employer provide ? Life and Critical is cheap whilst your young.

Sandtree

TIGASH said:

Thanks for your replies...maybe I've got the wording wrong...it could be critical illness cover that was vital and suggested that increasing to health insurance was a good idea. 

If its CI then Life is generally pennies or free to add it to the CI policy on the same basis.

I follow others that PHI (the full fat version of income protection) should be the first consideration as this will replace your income until your declared retirement age so that you can afford to live even if you are unfit to work.

Not a fan of CI personally and life is dependent on you having someone thats financially worse off by your death

TIGASH

Thanks for all your further replies. My current employer provides death insurance (payout when I die) I don't qualify for anything else. 

So the best thing is to look for permanent health insurance that covers my income if I were to become ill. 

aoleks

You need income protection…

kingstreet

TIGASH said:

Thanks for all your further replies. My current employer provides death insurance (payout when I die) I don't qualify for anything else. 

So the best thing is to look for permanent health insurance that covers my income if I were to become ill. 

Yes. Plan to cover until retirement age and choose ONLY "own occupation" rather than the cheaper "work tasks" where you lose out on a successful claim if you can hold a pen etc.

Choose deferred (or waiting) period which matches any employer sickness benefit period or for which you will have savings. The longer the deferred period, the cheaper the premium. During the deferred period many insurers will assist with rehab (such as physio or retraining) to help to limit the eventual claim costs.

As the benefits are paid free of tax, you can choose a level of benefit comparable to a percentage of your net income.

Increase options can help with benefits keeping their purchasing power.

getmore4less

Although not relevant now(but could be later) only insuring themselves/high earner may not cover worst case.

With a couple&|kids  worst case scenario is the non/low earner falls ill and the only/high earner need to give up work to care for the rest of the family.