Do you have life insurance?

[WaffleDogg20]

im a SAHM with a part time job. I absolutely love it but the only thing me and DH argue about is that I don’t have life insurance and he really worries how he would manage with 3dc and working/ paying for the mortgage etc.

so iv decided I should get it really just incase.

who are you with and what do you pay?

1.Mortgage protection to pay off loan if either of you dies. Separate policies ( not joint) in case you separate/divorce but your children would still the money. Write it in trust so it doesn't count as part of your estate and will be paid out very quickly rather than being paid out after probate is done. You will need to appoint trustees to look after the money if your children are young.

2.Consider an annual tax free income say at least to youngest being 22+ or finished Higher Ed. Much cheaper than insuring a lump sum to give you the same sort of annual tax free income. Written in trust as above.

3.Critical illness usually gives a lump sum if you are diagnosed with illness likely to cause death within a year or so, so not sufficient as protection if you develop a non fatal condition which would stop you working. The crucial thing with taking out Income Protection is choosing a company where the definition is 'being unable to do your own job' not 'any job' where it is much easier for the company to decide you could just become a waitress, postman etc. and decide not to pay out. Usually the Income Protection is paid out tax free and you would also get some long term state sickness pay out so as a rule the most you can insure your income for is 60-65% of your current gross income.

And before you do any of the above, discover what in service benefits you may already have through eg a public sector superannuation scheme or other work's offering. NB Despite the fact you may have left the scheme eg the Teachers' Superannuation Scheme years ago you may well still be able to access some benefits depending how many years' service you had, (minus the enhancement you'd get in service of course ), if you subsequently fall ill and unable to work. I have met many ex nurses, teachers etc who could have been getting a pension but didn't realise. For this reason alone it is worth keeping up your Union membership if you leave a job as they will be able to advise you.

If eg you would get 6 months full pay then 6 months half pay before going onto the long term sick pay rate it will be a lot cheaper to provide an Income Protection policy than if you need a policy which would kick in very quickly. An IFA ( Independent Financial Adviser ) or Union will be able to do the calculations for you.

I'd recommend Cavendish Online - part of lloyds banking group but they are whole of market brokers. (recommended by Martin Lewis - see the money saving expert website).

Not any more. I did have critical illness and life insurance but it paid out when I got cancer nearly 5 years ago. I made a lot of crap financial decisions in my 20s, but taking out life cover wasn't one of them.

Yes. We are a normalish household he earns £75k and I work 2.5 days a week for £30k. We didn’t used to but now we have one that pays off the mortgage and good death in service plans. I just feel that any less would leave the other really struggling regardless of who.

I’m paying serious consideration to critical illness cover, we are public sector with good sick pay but having seen colleagues have serious time off with illness im wondering about it. It’s mainly his salary I’d like to insure. Thing is I’d also like private medical cover but there’s only so much I want to be paying out every month.

If I were you op, the minimum I’d insure would be the mortgage.

Even mooter then

Had it when I was a SAHM. Latterly advised by a FA to renew to cover IHT.

I wish people would stop talking about death in service- its often not worth the paper it's written on. It's only really relevant for sudden deaths, if you were off long term sick you'd like have been let go from the company before you died and therefore DIS wouldn't pay out. Get your own personal policies don't rely on DIS -

disclaimer - DIS is not the same as salary sacrifice life insurance/CIC/IP you pay for via a work scheme (although it would end if you changed jobs so still worth having your own personal policies)

No, but I don't have any dependents or any immediate family at all.

I explained why I got it and to explain the cost. Jesus.

Yes, we have life insurance that pays off the mortgage plus a £300k payout if one of us dies. We also each have a critical illness policy which pays out £35k if you can't work due to illness or accident, or £75k if you die. It costs around £120 a month altogether because we left it till late-thirties and chose to include critical illness... Suddenly having young kids brought things into focus! It's expensive and morbid but worth it for peace of mind. It means that if one of us dies, the other will be free to care for the kids rather than worry about finances. The policies cover us till the age of 70 when our kids will hopefully be independent. For us it's 100% worth it because I was really starting to worry about how I'd cope if I lost my husband. Myself and the kids would be devastated and that would be enough to deal with without also losing our home.

@WaffleDogg20 ETA because I didn't fully answer your question. We're with AIG for joint life and single critical illness cover. It was the same total cost to get single or joint critical illness policies, except the joint only pays once - if one of you gets ill, whereas the single covers you both separately. Does your partner have insurance through his work? I'd advise getting independent life insurance in case he loses his job and the benefits with it. Joint life insurance would be good as you'd both be covered for the same payout if either of you dies, even though you're the lower earner.

We got the decreasing life insurance for the mortgage when we got our mortgage, can't remember who with. Didn't you get this with your mortgage? I remember we couldn't get a mortgage unless we had this.

We both do. DH has a good policy through his work. He is the main earner in our family but works away from home for weeks at a time (4 weeks away working/4weeks home on leave).

I work 3 days a week in a low paid job and care for DC the rest of the time.
While I don’t earn a significant amount, if anything happened to me DH would have to stop his job and come home to look after DC. It is not possible to do his job remotely and his qualifications would be pretty meaningless for other roles so he would need to go into a lower paid role and potentially retrain in another field.
He has his work policy, we have a joint policy and I have a separate policy. If anything happens to either of us, the mortgage would be fully paid, and there would be a significant sum left to allow flexibility with work.
My separate policy - some goes to DH and some goes directly into trust for my DC.

I did use a broker @MrJeremyFisher. He did an initial questionnaire with us (me and my husband) and made an application based on the insurer who would be most likely to approve. They said no so the brokers view was we wouldn't get cover anywhere else either.

I agree the over 50s plans aren't good value but it does seem like my only option.

Should be quite cheap in your 30s. Just go for the one that pays off the mortgage. Mine is £12 a month with Aviva and I'm 49.

I've only had it for six years as previously I had death in service cover through work.

I think you’re taking it the wrong way…my comment of, hsbc was really expensive for me but presented as the only option, was totally irrelevant for you as you didn’t take a mortgage (so likely different products offered) my comment was made even more irrelevant as you took yours 25 yrs ago and mine a few months. (I was mocking my myself for making a totally irrelevant comment)

We had a life insurance policy to pay off our mortgage if either of us died. We also both had death in service for x 3 salary. Now we've paid off our mortgage and both retired. We have insurance policy to repay one of the btl houses if either of us died still.

Apologies then. We were paying for the house. Just to a family member, not a bank.

£16 per month across two policies for DH totalling £300k. One is Legal & General and the other is through my employer.

£30 per month across three policies for me totalling £1.2m. Biggest part of this is through my employer so v cheap, but I’m paying £5-£10 for £100k with each Legal and General and Vitality.

I’m the main earner, DH is insured enough to pay the mortgage off.

All taken out in good health in our 30s.

Wow!

Neither of us have it, and we have a mortgage. I thought about getting it when we had children but DH would get a big payout from work if anything happened 🌲🌲 so didn't bother. It would pay off the mortgage but nothing left.

Yes I do. When DH died his life insurance didn’t pay out (because it was a genetic condition, even though we didn’t know about it) and as a result I lost my house. It was an added stress at an already horrendous time

Get a decent broker and find something that works for your personal circumstances.

Yes we do. Mortgage is paid off on our primary residence (and we also have 2 other properties) so in the event of our deaths it will go to our adult children.
My sister's husband died and without his life insurance and pension from his employer she would have been screwed.

I don't have life insurance because I have decent death in service provision at work, however I'm being made redundant end of December so will have no cover.

I do have c300k in my pension pot though. Presumably if I die before retirement this would provide DH and DD with a payout in lieu of life insurance? Or should I be taking out a (presumably at my age expensive!) policy immediately? Apologies for thread hijack, but might also be a consideration.

Go to an independent advisor/broker

I’m 60 with adult DC so only have enough life cover to clear mortgage, pay for my funeral and sort my estate out including allowing for inheritance tax

Yes we both got it when we were quite young because we bought our first house. So it was enough to pay off the mortgage. I was only22 he was 25 so our joint policy was less than £8 a month. It's with legal and general our mortgage broker got it along with our mortgage.

I now also have 3 x salary life cover through work and took additional cover for dh as he isn't covered through his employer I think it was £5 per month for £50k cover.

The reason for the additional cover was because my bil died suddenly at 36 leaving my sister with 3 young kids on her own. I have seen that paying off the mortgage helps obviously but actually when u lose the bread winners pay you need more than just the house paid off. She had all sorts of cover, critical illness and income protection. Those are quite pricey and she wishes she had thought more about it and had a larger policy on death. It would have really helped her out.