to expect parents to have life insurance as a matter of course?

[probablyoverinsured]

Is it not the first thing you think about when you first hold your newborn? How can I best care for this little one? What do I need to do/sacrifice to ensure their welfare? in any circumstances?

I appreciate you can't be insured for every eventuality, and with the best will in the world, you can think you have taken out adequate insurance, and in the event it doesn't actually pay out for some reason or other.

But it's about £2 a week, in most cases - surely this is factored into the cost of providing for a child, when you do your calculations? I expect there are a few that can't afford it, but most can.

I am just amazed to hear of someone recently, really struggling, with no life insurance payout for the children, because there was no policy.

Am I living in a fool's paradise? Don't most parents have life insurance? Am I just showing my ignorance? Why wouldn't a parent have life insurance? Do you? if not, why not?

I am not making a judgement of any kind on people who can't have it, I am querying the people who can have it, but don't

No never had it. Huge waste of money. My money was better spent on actually providing for my dc.

@probablyoverinsured no. You weren't. Not in your op.

What's the criteria for 'Can have it but don't' and who decides that criteria? And why do they get to decide it?

I don't have it, never have, and correct me if I'm wrong someone please, but I don't think I need it. Situation - 95% paid off on my mortgage, £1mil equity. Ex husband earns £200k plus a year. And has very wealthy parents. So, if I die/ fall ill - ex can take over with no financial worries. If he does - I can. I think! 50 years old, 2 teenage kids.

I dont have it either, late 40's. Had life insurance for years then i had a back injury and my policy ran out. Non smoker, active, pretty much tee total, slightly overweight, nearly £80 a month, i am a single parent on a low wage, i simply cannot afford it.

I think it is an essential but out of my budget at the moment.

Mine costs £200 odd a month. Best not to assume that everyone's health and circumstances are the same.

We took out life insurance to cover the mortgage as soon as we took out a mortgage and we'll before we had children but ultimately car as a compulsory and buildings closely followed by contents insurance are probably more of a priority for most people. You can buy insurance for almost call risks in life, it's about risk vs cost and I'm sure most people would currently choose food & fuel over the possibility of dying prematurely even though it happens and the consequences are devastating. There's not much point in life insurance if you can't afford to feed everyone.

Where the heck is it £2 a week 🤣 I'm not old, never smoked, don't drink, and it's AT LEAST £60 a month.

but thats when you take it out! when you are young and healthy.

Not everyone is healthy when they're young. Plenty of people have disabilities or health issues from birth or childhood. I'm one of them.

We didn't have life insurance, then a lovely friend of ours was sadly killed in a car accident and seeing how much her husband struggled financially in the aftermath made us realise we would be stupid not to get it just in case. We pay £48 per month between us, which I get not everyone can afford, but we would cut down on a lot else before giving that up.

Life insurance hasn’t been a condition of getting a mortgage for many years. It’s also not just £2 per week. I’m not sure where you got that figure from.

We have life insurance because my income wouldn’t be enough to pay our mortgage if anything happened to my husband. However, very few of my friends or family are insured. I would consider it to be an expensive luxury.

DH can't get it (we tried) because he has an ongoing illness (on a necessary organ) but they can't diagnose what. He's had this illness for about 15 years and they've stopped trying to diagnose it, said that it was probably atypical X (x to protect our identity) but refuse to put anything onto paper so we can get insurance because they can't prove anything. Probability of him dying of this could be 5% if it indeed is atypical X.

We do have 500 k equity in the house though, so if he dies I can downsize and use the rest. He's a high earner so if I die there's no problem. If we both die they can sell the house. I've also saved 7k by now in my 2yo's bank account for drivers license/uni/down payment on a house.

I also knew all this before I conceived.

I don't bother with insurance generally to be honest, except building insurance which is part of my leaseholders service charge. But the amount I've saved over the years in not getting contents, travel or life insurance has helped me overpay my mortgage and have a fair amount of savings so horses for courses I guess.

@Lellochip - sorry, was sorting the DC's lunch and only just spotted this!

You won't like my answer 😖 If you don't want to read the whole blurb below, basically I wouldn't recommend them. Expensive for what it is and rarely delivers as expected. Lots of income protection claims refused in comparison to others.

Critical illness won't cover things like anxiety/depression or a bad back etc so it depends what you're really want to cover yourself for. If you want those things covered then income protection is what you need. But it's not an easy benefit to claim.

A decent critical illness policy will pay you a healthy sum that you can do with what you want, and buy you a lot of time off work if needed or just improve your quality of life, or even buy private treatment. For me, I only really wanted to be covered for the big things that could seriously mess up my health - cancer, stroke, heart attack, and so on.

Income protection - honestly, the claims process is a bloody nightmare. Every company is the same. I can't tell you how many seminars I went to on this subject. Firstly, make sure you understand that it's an income replacement scheme - that means you'll need to prove what your income was in the 12 months before you got ill. And if you have any money coming in from another source, they'll take that off your total entitlement. Also, you can't cover 100% of your salary - it's usually about 60% maximum - and that's from all sources.

So for example, let's say you earn £100k (because it's easy) - 60% is £60k, minus £4k state benefits (whether or not you receive it) - £56k divided by 12 = £4666 per month. That means you can get £4666 per month from EVERYONE. If you have paid for £4000 income protection per month but you're getting £1000 per month from your employer, this money will be deducted from your total entitlement of £4666 - so that means your payments will only be £3666 even though you've paid for £4000 per month. Any other income will also be deducted (but not a critical illness payment). So you'll have to make do on a maximum of 60% of your salary.

That's the financial side of things which often causes problems - I've just skimmed over the basics there.

The worst part of it is the medical assessment. Your GP signing you off work won't suffice for your insurer. They'll need a full report, and also a report from your consultant. If you haven't got a consultant yet or your consultant writes a report that's not sufficient, you'll need to attend a medical examination.

Getting all the medical information in can take several months. Very few income protection claims start getting paid when they're due. And even then, if they are paid, you'll be regularly reviewed. Medical certificates from your GP aren't sufficient - it's an ongoing review process of getting reports every couple of months (usually) and sometimes sending you for another examination. They send nurses to your home to talk to you about what adjustments can be made to your job to get you back to work.

And that's the final kicker - it's not your specific job at your specific company that's covered. It's your occupation in general. So if there's something which is unique to your company but that wouldn't apply elsewhere - eg/no lift - then your claim won't be paid. Some income protection policies are based on an own or suited definition - that means they are only paid if you can't do your own occupation AND you can't do another occupation that you're suited to by virtue of your training, education and experience.

Sorry for the long reply, I'm trying to cram a lot in here. But in short, income protection claims are a bloody nightmare for most folk. And they don't give them what they were expecting, or pay out as quickly as people have been led to believe.

I dealt with income protection claims for 15 years + - I wouldn't touch one of these policies. I also dealt with critical illness claims for the same period and I think they're invaluable.

Also - income protection policies are the ones where insurers instruct private investigators to watch you if they have any suspicions. I saw hundreds and hundreds of videos over the years.

Ours is attached to the mortgage and then my husband has a seperate one with work.
I have a death in service with my job. Should I take out another one?

Another thing to add to my list of nightly worries. Cheers for that.

"I am not making a judgement of any kind on people who can't have it, I am querying the people who can have it, but don't"

That's good because as someone with very very little financial knowledge or understanding you're in no position to judge 🙈🤣

"Ours is attached to the mortgage"

It won't be. You may have taken out a decreasing policy over the term of your original mortgage but your mortgage is not attached to a life insurance policy.

@StalkedByASpider Oh. You're right, I don't love that answer! 😅My thinking was that 70% of my monthly wage would keep me comfortable whereas a lump sum would clear my mortgage only, but maybe I should rethink! They pushed for both when I signed up but was so expensive.

Yes, you are very much showing your ignorance, are you even a parent? I would say not. I find it really, really sad if anybody's thoughts are those that you describe when you first see your baby. It seems highly improbable. Surely you've spent at least some time preparing, picking maybe a pram, or a car seat or something. Are you a parent really @probablyoverinsured If you were a parent, you would know that you have generally given some though to being a parent before the birth, not at the moment you hold the baby, and all those thoughts you describe, that's really sad if you are a parent and straight after birth you thought of insurance, and if you hadn't thought about any of these things prior to having a baby, that's just weird.

Ours is significantly more that £2 a week!

I doubt you can get decent cover for that.

It's just as important that it pays out of terminal illness etc than death, which is when the prices go up.

But I agree it is so important to have.

I know, I'm sorry!! In fairness, once it's actually in payment it can work quite well - but getting to that point can be difficult. You also shouldn't expect to just be left in peace - they will be checking in with you regularly to see how you're feeling and to assess whether you can go back to work - unless you have something desperately awful such as terminal cancer etc.

OK, trying to be positive 😅 Income protection payments are not taxable so if you've insured yourself right up to the limit of 70% (if that's what your policy allows) and you're not getting income from anywhere else, you will more or less cover your earnings because it's based on your gross salary. So once you take tax/NI off your earnings, it will be roughly the same as your 70% IP payment.

I've just seen a lot of these claims declined. Way, way more than any other type of claim. People think they just send in a medical certificate and payment starts but it's nothing like that. And income protection is bloody expensive too! Once payment starts it's quite hard to justify stopping it (although that does happen) so insurers will be very robust in their pre-admission checks.

We had hundreds of claimants who had been receiving income protection for years - so it can and does pay out. But expect regular checks, and a lot of interrogation when you first put in a claim. It used to take at least 3-4 months to get the evidence needed to start payment......

I'm trying to be balanced here 😂

I pay £9 a month for £200k of cover and terminal illness cover with Aviva, 45 year term when I took it out and covers me until I'm 70. This price is fixed for the duration of the policy.

@doingitalllagain how old are you?
And terminal illness pays out if you are expected to die within 12 months of a terminal illness diagnosis. That only happens if you are very unlucky. Everyone I know who has died from cancer for example lived longer than that with treatment.

Why is it just as important to have terminal illness cover?