Income protection insurance

Usermah

Dear All,
I started a family late in life and am considering what to put in place to take care of my family in case I lose my job. I have spoken to a few brokers about income protection insurance in case I lose my job, however it seems that only 1 insurance company is prepared to write me a policy because I am a higher earner. Whilst I am a high earner my expenses especially children expenses are very high and I want to protect my family so what can I do? Does anyone have any ideas? How do high earners protect themselves? Thank you

tacpot12

You may find that few insurers want to provide you with cover if you are expecting all your income to be protected. Most policies cover 70% of income, but you might have more success if you reduce this to 50%. You shoudl also be looking to defer payment for at least 6 months, and possibly longer, and build up some cash savings to cover this period. 

You say that your child expenses are very high. You need to consider whether these costs might reduce if you can no longer work (you could provide you own childcare for example if you are not working, but this might be harder if the reason you cannot work is illness). You could also look for a policy that didn't cover you loosing your job (i.e. redundancy cover), but just covers you for long-term illness. Your partner should also look to have some income protection if they are working, and you should consider the fact that it is unlikely, but not unheard of for you both to lose you jobs at the same time. The risk of this seems higher if you both work for the same employer.    

Usermah

Thanks tacpot12. Yes the insurance company will only consider 70%, but even then I am disqualified because my income is over 120k. Have you heard of international insurance companies providing this type of insurance?