Income protection for part time job?

robaber

Hi

I work full time and my wife works part time. We are both 40 years old and have one dependent, under 18.

My salary makes up around 80% of our household income and my wife's around 20%.

We are very fortunate that my salary covers our monthly experiences. We use my wife's income to make additional contributions to our pensions and to invest in a Stocks and Shares ISA.

A few years ago we took out income protection for me. This starts at 6 months (my employer would cover e first 3 months and we would self fund 3 months) until my retirement. This would cover our expenses.

Recently we have been considering taking out the same for my wife. This would start after 6 months, to reduce the cost of the premiums. If she was unable to work due to ill health, we would be able to continue to cover our expenses, from my salary.

However, we would loose the contributions to our pensions and to our investments.

In a sense, would paying income protection, insure these contributions over the rest of her working life.

They may also be additional costs, if she required equipment or care, due to illness.

We both have life insurance. We don't have critical illness cover, as we have an emergency fund and some investments, which we could use.

I may be overthinking this.

Any thoughts or suggestions would be helpful. Thank you.

MyRealNameToo

Not really sure what the actual question is?

You'll still have the 60-70% cap on the limit you can insure which may mean a bigger reduction in income for her assuming her part time work isnt particularly well paid but other than that you can still get cover and it may be prudent if your plans are dependent on her income and the premiums arent disproportionate.

Weighty1

It's worth noting that if your wife was unable to work then she'd only receive tax relief on the first £3,600/year which is contributed to her pension pot.

In effect, she can still contribute more but she just wouldn't receive tax relief and YES, by taking out the income protection it would protect these contributions since how you spend the proceeds from an income protection claim is entirely up to you.

In the heading you mention 'part time job' so it's worth noting than in some instances the claims definition may change and become more stringent for those working under 16hrs/week than those working more hours, moving from an 'own occupation' definition of incapacity to a 'houseperson' definition, which can make it incredibly difficult to claim on an income protection plan due to the degree of disability required.