Income Protection Insurance (worth it?)

JayG81

Hi all, 

i have recently had an offer on a house accepted. I will be taking out a mortgage. 

I always try my best to be covered if certain things happen. 

I have received some quotes for mortgage only cover. And that seems pointless. I got quotes for a bout £25 a month. However any payments would wipe out universal credit. Basically, the amount you’d receive isn’t worth paying for when UC would match a lot of it anyway. 

Therefore, income protection for 50% of my gross income seems a lot more worthwhile. However, the premiums I got quoted were about £50 per month.

do you guys think that is a reasonable premium? Is that what the premiums were like pre-covid? Would it be better to wait until things calm down more? The premium does seem high but the peace of mind would be amazing. 

Thanks

SaverRate

Have you gone to an insurance broker for the quotes? What’s your age, medical conditions, amount insured etc.

JayG81

SaverRate said:

Have you gone to an insurance broker for the quotes? What’s your age, medical conditions, amount insured etc.

Got the quote of a comparison website. I’m 40, no medical conditions and it would pay of 1250 per month for a year. It’s covers accident, sickness and unemployment 

Andy_L

Is UC going to be enough to both pay your mortgage & your living costs?

MEM62

Like any other insurance, it is a judgement call for you as to whether you want a particular risk covered by insurance or not.  In my case, I do not have income protection insurance and, if I had, would never have claimed on it and I am now 59.     

kimwp

As a home owner, you wouldn't get money towards paying the mortgage (unless the house is for sale, I think), so you'd need to cover all your costs on about £400 a month if you rely on UC.

ashe

Also universal credit doesn't pay out if you have a certain level of savings, which I assume you would have? Or at least would recommend you do have. Some  insurance policies may be the same 

lassfarfromhome

Consider proper Permanent Health Insurance that pays out if you are unable to work through accident or illness, and until you return to work, reach retirement age, or die.  I have a chronic illness (developed out of the blue a few years ago) and will likely never work again.  Will be paid a proportion of my salary (which increases with inflation) for another 20 years, every month.  If I hadn't had that insurance I'd be in a single bedroom at my parents' and have had to sell my flat.

lassfarfromhome

ps and if you think benefits will be enough to live on, you are quite wrong.  I cannot work, and never will be able to again, and I get £500 per month from the govt

ian16527

Definitely go for the mortgage protection for peace of mind alone.

I was made redundant and had mortgage protection, loan protection and income protection for £1000 per month - this was 2003.

For the first 6 months the jobseekers allowance (based on NI) as it was then was not means tested therefore the income protection could be claimed. After 6 months it was means tested.

Not sure if this has moved to UC now.

The downside of this is you still needed to sign on, and get a form filled in for each claim. I used to fill them in for the staff. The other downside was you had to provide documentary evidence of job applications and replies monthly for the income protection only.

It was worth it as I was better off not working although got another job after 4 months as the job market was poor at the time. The income protection was with Compass who were sometimes difficult to deal with. 

Be careful about the waiting period as its usually 3 months before you can claim.

Andy_L

Do you get anything relevant from your employer?
Better than statutory redundancy/sick pay?
Health insurance etc