To cancel this policy?

[spewylewis]

Not exactly AIBU, but posting for traffic.

Got my first mortgage a few months ago, only £224 pm over 15 years. Have taken out the following:

life protection insurance - for 34 years
combined life and critical illness - for 15 years
Income protection - for 15 years

Does everyone else have the same level of cover? I have one DS(12) and I'm single. In the event of ill health, i would get 6 months full pay, then 6 months half pay.

The income protection part is the most expensive at £22 a month, and would pay out half my monthly wage after my employers stops paying me at 12 months.
This is the one I'm really wondering about.

I really just took everything the estate agent advised, but I'm trying to cut down all my outgoings to maximise my savings, so interested in what others do for different levels of cover.

We just have really good life insurance that pays out if terminally ill as well.
We got quotes for critical illness and income protection, however for both of us we were looking at £100 a month, but we're both employees and have decent sick pay (same as yours). We didn't go for it in the end. Just felt too much for something we may never use/need.
If we were self employed I feel it would be a different story.

I seem to recall that some or all of these were a condition of our mortgage, so you should be very careful before cancelling if you don't have equivalent provision elsewhere. Sensible not to pay for something you get anyway (eg generous long term sick pay - my old firm would pay 75% of your salary forever, and at least one member of staff had to take several years).

The estate definitely didn't tell me that income protection was essential, I just thought it was really the sensible thing to take it all, but now I'm not so sure. I'm very tempted to cancel it.

We need more info like:

Who would look after your child if anything happened to you?
How easy would it be for you to get another job if you were made redundant?

I would normally advise a parent to have some kind of cover unless you have wealth parents to fall back on. Try CAB for advice - they are very helpful. Most insurance is a gamble of sorts ie Critical Illness can provide a lump sum if you are diagnosed with something awful and I do know people who have benefited from it and then made a full recovery but you can also pay it for years for no return (and that's how they make their money).

Thanks Ally

If the worst happened, DS would go to live with his dad and SM.

My current job is admin based, so not specialist and hopefully fairly easy to find something similar, although salary would not be as good. The income protection only covers ill health though, as far as I'm aware. Hence, it only pays out once my 12 months pay from my employer ends.

I would lose that cover if I were you and if you need to save ££

If it were serious serious the critical illness will provide a lump sum anyway.

Critical illness will cover certain conditions but not others. Friend had breast cancer which was fully treated and she was back at work in a few months and, thankfully, four years on is clear. She was paid £187k from CI cover.

I suffered an injury leading to disability and chronic pain. I was paid for six months on full pay then five months half pay and then they dismissed me for capability. I would not have qualified for CI but Income Protection probably would have paid. Luckily for me dh pays the bills and mortgage but if I'd been a single parent we would have lost the house.

So be very careful about cancelling. All these policies seem expensive until you need them and of course we all hope we never will but sometimes stuff happens.

You took advice about financial products from an Estate Agent? Really?!

What is illness life protection?

Or the other two policies you are much more likely to make a claim for the Income Protection Benefit than anything else which is why it's so expensive.

Yes, I really did. He was highly recommended to me, and I'm glad I went with him. I don't have his exact credentials in front of me right now, but perhaps EA was the wrong term. But he sorted my mortgage and insurance policies.

I'm not sure what you refer to when you say "illness life protection" as I didn't mention that?

But i believe I have:

Life insurance which will pay out to my son if I die

Combined life and critical illness cover to cover my mortgage should I die, or become become critically ill

Income protection so that I receive half my wage should I become unable to work for more than 12 months.

My friend encouraged me to get income protection after her dh was made redundant and couldn't find another job for over a year. It paid their bills and really helped.

What would you do if you find yourself with out an income?

So ... life insurance is for your son if you die but will he need it if he goes to his Dad? Just asking.

Also you don't have to worry about your mortgage if you die as the lender will just repossess the property?

You only have to worry about income for you 2 so sadly the best one (and the one I think you should keep) would be the income protection. Then again if you could survive on benefits (or temp) you could ditch it. But you need to get advice from someone who has all the relevant details to hand. Estate Agents/Mortgage Advisers are just out to sell you as much as they can (they get commission on the policies).

PLEASE PLEASE PLEASE don't cancel your cover! Income protection and critical illness is the best cover you'll ever have/need. You're far more likely to be off work ill than die but for such a small amount let month it could change your life. I am a mortgage consultant and I've seen so so many customers at the good and bad end of having and not having cover in place including loss of homes, marriage break ups, going back to work too soon to pay bills and then ending up so much worse and also in the case of one customer with a heart condition - DYING because they had to go back to work too early. I've also seen the good side where people have been able to leave work completely after ill health, mortgage paid off, enough money extra to invest, buy buy to let's, go back to work very part time because they no longer have a mortgage to pay. It can be massively life changing in a good or bad way. Have you ever had to see someone move home whilst they go through chemo? I have, it's horrendous.

The only people that will tell you "you don't need all that just cancel it what a waste of money are STUPID and have not gone through it or known someone that's been through it. Sorry to sound melodramatic but it's true and I speak from first;second and third hand and professions experience!!

Thanks for the replies.

I have decided to keep the policy, but I'll be keeping the others too. I want to know my son is set up if anything happens to me. Yes, he'll go to his dad, but I still want to know I can contribute to his future if the worst happens, and I want the mortgage paid off and the house to be his, in the same scenario. Both my parents died when I was a child, so for me, having that security for him is not negotiable.

Re redundancy, the policy doesn't pay out for that anyway, only if I can't work due to illness or accident.

Probably a wise choice even if you never need them. Very responsible re your son too and sorry you didn't have that.

My goodness MrTrebus you have a lot of unlucky clients!

Redundancy can be a great boost to your savings if you have been there a while and get another job right away - both myself and my partner have benefited twice each over the years (although its not a fun thing to go through).

@allypally999 just a lot of clients over a long period of time. They are not particularly unlucky, you are lucky to not have experienced/know anyone that has been through this because so many people do that's all.

OP so glad you now see it that way

Actually I said I did but not many thank goodness

We had a very pushy mortgage advisor (sounds like this is what you're talking about, OP, rather than estate agent) who rammed critical illness down our throats - because that's what they earn the most commission on. He was just awful. He literally said 'one in three people gets cancer, that means either you, me or your husband will get cancer - at least I know my family won't starve if that happens to me'. Vile man. Never mind that critical illness doesn't even cover all cancers! Anyway, we sought advice from an independent financial advisor who reviewed our situation as a whole, and helped us figure out that income protection is more important in our circumstances. We couldn't afford both right now (I'm about to go off on mat leave). We'll get critical illness when I've gone back to work post- baby(ies).