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    • il638
    • By il638 9th Jul 18, 8:08 AM
    • 35Posts
    • 1Thanks
    il638
    income/unemployment protection insurance advice
    • #1
    • 9th Jul 18, 8:08 AM
    income/unemployment protection insurance advice 9th Jul 18 at 8:08 AM
    Advice wanted please

    i am married with two kids now and have a beagle street life insurance policy to cover paying mortgage in the event of death.


    however i am now thinking to get more cover long term cover to cover long term illness or unexpected unemployment etc.
    what are the best options? so i can keep up with mortgage payments and a few other bills require about 600 but think i should play safe and look for something that would give 1000 a month.


    also need it long term like till retirement age etc. is their any such thing? quick google shows illness unemployment cover for twelvemonths etc.


    anything long term? anybody with similar able to advice best options?


    cheers


    edit: p.s. just checked with work I have the following:-


    Life Assurance
    5 x basic salary to beneficiaries



    Income Protection
    Provides you with an income (most cases 75% of your basic salary less the government benefits) should you fall ill and are unable to work for a prolonged period.


    Critical Illness - tax free lump sump if diagnosed with critical illness
    - - 25,000 (25,000)
    Last edited by il638; 09-07-2018 at 8:20 AM.
Page 1
    • tacpot12
    • By tacpot12 9th Jul 18, 10:01 AM
    • 1,367 Posts
    • 1,177 Thanks
    tacpot12
    • #2
    • 9th Jul 18, 10:01 AM
    • #2
    • 9th Jul 18, 10:01 AM
    Such insurance is available, it is called Income Protection Insurance and you are very wise to seek it out.

    This insurance is reasonably complicated, so I would do some research and ask lots of questions before purchasing.

    The cost is based on a number of factors:
    1) How much income you wish to protect. You are wise to ensure that you have a little more than all your non-discretionary spending to be covered. Don't forget you will save some money if you are not going to work.
    2) How the income might rise in respect of inflation - You want it to rise at CPI as a minimum.
    3) How long do you have to be unable to work before the policy starts paying. The longer you can delay this the cheaper the insurance should be. Given the advice that often appears on MSE that everyone should have an emergency fund that would last them six months if they couldn't work, this is a good starting point to consider when the insurnace should kick in. If you don't have a six month emergency fund, I would set the insurance to start after six months and start saving this emergency fund as a priority. If you already have a year's income saved, delaying the payment for 12 months is much cheaper than if you delay for 6 months.
    4) Whether the policy will pay out if you can't do your job OR any job. This is one of the more complex aspects of this form of insurance. It will cost more if it has to pay out if you can't do your job, as it is more likely that something will happen that affects your ability to do a specific job rather than a general job. I'm not sure what to advise here. You need to ask a lot of questions and think about different scenarios that might arise where you might be able to do some work when injured, but not work full-time.
    • tacpot12
    • By tacpot12 9th Jul 18, 10:07 AM
    • 1,367 Posts
    • 1,177 Thanks
    tacpot12
    • #3
    • 9th Jul 18, 10:07 AM
    • #3
    • 9th Jul 18, 10:07 AM
    Did you shop around for your life insurance before buying with Beagle St?
    Did you consider ordinary Term Insurance to cover the mortgage?

    Ordinary term insurance pays out a fixed amount for a certain term. I found that Term Insurance cost more or less the same as Decreasing Term Insurance, but resulted in more money being left to the children if I died. I pay 23/month for 300K of life cover with Legal & General. This was taken out when I was about 40 and lasts until I am 56. I paid the mortgage off when I was 45.
    • il638
    • By il638 9th Jul 18, 10:46 AM
    • 35 Posts
    • 1 Thanks
    il638
    • #4
    • 9th Jul 18, 10:46 AM
    • #4
    • 9th Jul 18, 10:46 AM
    cheers for that, I did look around and me and mrs both have a single policy with beagle street for a fixed amount up to retirement age, it doesn't decrease.


    reasonably priced, we are 30 yrs old.


    as for the income protection, any companies recommended? i'd be happy to delay payout for 6 months but does it need to be renewed yearly or can it be fixed to retirement age like the life insurance? I just want it their to make sure essential is covered in event of the worst happening or something beyond my control.
    • dunstonh
    • By dunstonh 9th Jul 18, 11:34 AM
    • 94,484 Posts
    • 62,433 Thanks
    dunstonh
    • #5
    • 9th Jul 18, 11:34 AM
    • #5
    • 9th Jul 18, 11:34 AM
    Beagle Streets policies are budget level in terms of coverage. Not quality. No problem with that as they are targetting the market that isnt interested in quality focus but price focus. However, sometimes people dont realise the differences and think policies are all the same.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • tacpot12
    • By tacpot12 9th Jul 18, 11:53 AM
    • 1,367 Posts
    • 1,177 Thanks
    tacpot12
    • #6
    • 9th Jul 18, 11:53 AM
    • #6
    • 9th Jul 18, 11:53 AM
    Income Protection Insurance is for a limited term, most usually this is set to your expected retirement date. I would set this carefully, erring on the side of caution. If you get lucky and you find you can retire early, you can (and should) cancel your Income Protection policy.

    The level of cover can often be set to rise in line with inflation, so that it doesn't need to be renewed or revised each year. It is worth checking whether the premiums will also rise with inflation.

    I had a competitive quote from Aviva a while back, and would recommend them. The person I spoke to at Aviva was very knowledgeable and helpful.
    • Weighty1
    • By Weighty1 9th Jul 18, 12:56 PM
    • 366 Posts
    • 166 Thanks
    Weighty1
    • #7
    • 9th Jul 18, 12:56 PM
    • #7
    • 9th Jul 18, 12:56 PM
    cheers for that, I did look around and me and mrs both have a single policy with beagle street for a fixed amount up to retirement age, it doesn't decrease.


    reasonably priced, we are 30 yrs old.


    as for the income protection, any companies recommended? i'd be happy to delay payout for 6 months but does it need to be renewed yearly or can it be fixed to retirement age like the life insurance? I just want it their to make sure essential is covered in event of the worst happening or something beyond my control.
    Originally posted by il638
    Your original post states you get income protection for 75% of your basic salary, so in that respect do you need more income protection?

    If you arranged a personal plan on top of the employer provided cover you are going to be very limited in respect of how much you could claim if you were claiming 75% of your pre-incapacity earnings from your employer scheme, *unless* you earn significant bonuses or commission which the employer scheme doesn't cover.

    I'm guessing you have an office based occupation? If so then you are almost certainly going to be covered with an "own occupation" definition, as few insurers offer any other than this now and if they do it's only for those in more risky occupations.
    • kidmugsy
    • By kidmugsy 9th Jul 18, 12:59 PM
    • 11,580 Posts
    • 8,101 Thanks
    kidmugsy
    • #8
    • 9th Jul 18, 12:59 PM
    • #8
    • 9th Jul 18, 12:59 PM
    http://monevator.com/do-you-need-income-protection-insurance/

    http://monevator.com/family-income-benefit-the-forgotten-policy/

    http://monevator.com/life-insurance-and-protection-a-primer-or-why-you-should-buy-renewable-term-life-cover-most-of-the-time/
    Free the dunston one next time too.
    • il638
    • By il638 9th Jul 18, 1:46 PM
    • 35 Posts
    • 1 Thanks
    il638
    • #9
    • 9th Jul 18, 1:46 PM
    • #9
    • 9th Jul 18, 1:46 PM
    Beagle Streets policies are budget level in terms of coverage. Not quality. No problem with that as they are targetting the market that isnt interested in quality focus but price focus. However, sometimes people dont realise the differences and think policies are all the same.
    Originally posted by dunstonh

    yeah this one I just wanted simple to cover mortgage in the event of death of one of us its for 150k

    I hope it does just that and being level term, still have some left over for the other to take time off work to sort kids.
    • il638
    • By il638 9th Jul 18, 1:48 PM
    • 35 Posts
    • 1 Thanks
    il638
    Beagle Streets policies are budget level in terms of coverage. Not quality. No problem with that as they are targetting the market that isnt interested in quality focus but price focus. However, sometimes people dont realise the differences and think policies are all the same.
    Originally posted by dunstonh
    Your original post states you get income protection for 75% of your basic salary, so in that respect do you need more income protection?

    If you arranged a personal plan on top of the employer provided cover you are going to be very limited in respect of how much you could claim if you were claiming 75% of your pre-incapacity earnings from your employer scheme, *unless* you earn significant bonuses or commission which the employer scheme doesn't cover.

    I'm guessing you have an office based occupation? If so then you are almost certainly going to be covered with an "own occupation" definition, as few insurers offer any other than this now and if they do it's only for those in more risky occupations.
    Originally posted by Weighty1

    looking into details that income protection through work seems fine for sickness etc. but I need something for unexpected redundancy or unemployment. while out of work me thinks.


    anything that will cover this gap? id hope id be back in work asap elsewhere but its just in case i guess. and yes its an office based job.


    thanks for all the help guys
    • Weighty1
    • By Weighty1 9th Jul 18, 1:56 PM
    • 366 Posts
    • 166 Thanks
    Weighty1
    There aren't the same long term benefits for unemployment. Typically unemployment plans are limited to 12-months although some do cover 24-months. They also only cover involuntary redundancy, not other reasons for unemployment. If I'm honest, I generally find these types of plans relatively expensive for the level of cover they provide, however, if you are intent of covering unemployment a quick google of "unemployment insurance" should throw up hundreds of options.
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