not to have life insurance

[thefudgeling]

I am a postgrad student, my husband is a self-employed tradesman. We have a ds (1 yo). We do not have life insurance. Are we irresponsible parents?

I was checking how much life insurance/critical illness cover we had recently. Thing is life insurance will only pay out for a death, its critical illness which will payout for cancer etc. From when we took the cover out i think we were told that statistically speaking, you are far more likely to need the illness cover than the death benefit.

It used to be a condition of getting a mortgage that you needed life cover. It no longer is.

Insurance/Assurance. It's semantics TBH.

They just need some cover.

Ah, thanks. Feel less stoopid now!

The problem with critical illness cover is that they will try whatever they can to wriggle out of paying out. You have to read the small print very carefully to check you are covered and what you are covered for, then decide if it is worth it.

Life cover is a bit more straightforward.

I would get some, I am in the process of.
Purely because my Mum died 2 years ago, she had none and even a "budget" funeral is about 4k, so whilst grieving I had to worry about how on earth I was going to pay for it. If she had of had it, it wouldn't have been an issue.

Tits if thats your main worry you can get a prepaid funeral plan. My mum had one, she bought it years ago and so when she died her funeral was already paid for which helped my dad and just took a bit of stress off him. If you get it all sorted now if you die on another 60 years your funeral wont cost anymore money...I am def gonna look into that.

Sorry about your mum :(

Camdancer I think the position has changed with critical illness cover recently - there has been in the last few years a change which means that insurance companies don't try wriggle out of it - just googled and found this article 93% of claims are paid out

www.criticalillness.co.uk/association-of-british-insurer-note-improvement-in-critical-illness-payouts/

I have a sufficient to pay mortgage, pay a generous lump sum and a monthly income. if we both died it pays twice iuswim. as such if either died neither would have to work whilst children are in education, would be able to cover fees etc. if we both died children would go to friends who could make provision for them.

Have seen two young families lose a parent suddenly and my friend has a terminal diagnosis in at 35. all three would have been so helped by insurance.

Hi all. I'm a financial advisor so should be able to help.

To figure out of you need life cover or critical illness cover you need to work out what would happen financially in each of these situations:

1. You are off work sick and not getting paid (and possibly costing more - think adapting the home, private care etc)
2. The same situation as 1) but for your DH/DP
3. You died (and therefore had no more money coming in and/or couldn't look after the children)
4. the same situation as 3) but for your DP/DH.
5. one of your children is seriously ill and you need time off work/private care etc

If you have an answer to all of these questions which you are happy with, then you don't need cover. For example, if you are a SAHM and your Mum would look after your kids if you died and she has oddles of money and a spare room (or two?) at her house for kids, then you do not need life insurance for yourself.

As another example, if your Dh was ill and not able to work and your plan is that her would retire earlier and you'd use some of your savings for retirement to tide you over (as long as there is enough to go round!) then you don't have a need in 2). And so on...

If you're not happy, then you need to get some cover in place. The people who most need cover are 1) where only one person works or one person earns significantly more than the other 2) where someone is self employed, 3) where someone has big debts/mortgage relative to their incomings, 4) where someone has no savings to fall back on, 5) where someone has no family/friends to fall back on for childcare/financially.

I'd definitely recommend it, as others have said, it needn't cost as much as you think. A good adviser will find out about your needs, offer a tailor-made solution that is in your budget, and deal with all the paperwork for you. I always think something is better than nothing when it comes to protection.

Hope that helps.

I would say irresponsible when you have kids

sorry. We had it as soon as we moved out with no kids. I think it is v important

Am watching this thread with interest as I looked into life insurance after DD was born but it seemed really expensive. We don't have a mortgage and we have really good savings so I don't think we need it.

But I'm interested in whoever said they got cover from Aviva for £5/month for 100,000 ...

Just went on their site and got this result:

"This is the life insurance cover we could offer you for a monthly payment of £7.32

Your cover: £5,000"

Wtf?

The other thing to think about is if you and DH both died, who would pay for the cost of bringing up your son? Life insurance would pay out in this case and you wouldn't be leaving a financial burden on the appointed guardian of your child.
I've have agreed to be guardian of my nephew and niece should anything happen to both their parents but am a little worried they may not have any financial provision in place for this. Given that we couldn't squeeze two more children into our 2/3 bed house comfortably I suppose I ought to ask them about it just in case.

I need to sort some. I looked into it but couldn't figure out how you decide how much you need. I was guessing enough to pay off your mortgage and then some maybe? But really no idea where to start. But we need it as now have DD and DP is self employed so would be stuffed if he couldn't work.

Would be happy to talk to adviser but do you have to pay them? Where do you find one?

thing1 def ask them. My dsis and husband are guardians for our children and part of the 'deal' most definitely is that some of the money we leave would be used by them to buy a bigger house (theirs is a 2 bed). A proportion of the new house would then be 'held in Trust' for our kids.

I think it would be very unreasonable of us to make no provision for this.