To insure or not to insure?

[FiftyShadesofViper]

I am currently trying to help a friend sort out his finances after illness, divorce, debts, etc.

He has life cover (in addition to death in service cover with employer), income protection insurance and critical illness cover which is costing over £100 a month. Meanwhile he has debts he is struggling to pay.

I can understand that after being ill there is a value to income protection, just in case of recurrence but am I being unreasonable to suggest he cancels the rest? He thinks I am and says this stuff is all essential, what if he had a heart attack, got cancer, etc.

DH and I have never been insured for all of this. Anyone got any thoughts on this please?

It depends on his circumstances. Does he have any dependant? Does he have a mortgage?

Dependants

If he has dependents I think it's really important to have life insurance.

He would be best off getting some professional advice. There's 2 ways of looking at it - he could be putting that money aside towards debts eac month, but at the same time if something happened to him eg heart attack, cancer etc how would he afford to live?

These covers are more important if he has children he needs to support, if he has a mortgage etc. Would need a lot more info about him to suggest how important it is really. My step dad has cover in place from before he had his heart attack, if he applied for anything new now it would either be declined or completely unaffordable so it's a very good thing he took cover when he did!

He has children but they have their main home with ex-wife and would be the beneficiaties of the death in service benefit from employer which would be over 100k each so I don't see why he is paying out to give them more when he could be paying off other debts. It is not a situation where they would be homeless, etc if he died (which is not likely btw as he is relatively young, no major risk factors).

He has a mortgage so I can see the point of income protection but not the others.

I agree with you. If his mortgage balance is covered and he has a death in service benefit then the estate he leaves behind for his family assuming an average value house would be pretty substantial. All the other insurance you describe I would call 'nice to have' rather than essential. No point being in debt when you're alive just so others can be well off after you've gone.

That sounds quite expensive, we pay £47 per month for both me and DH for a fixed sum of £0.5m, however we have only got life insurance, not critical illness or income protection (since we both individually earn enough to pay the bills, and unlikely we'd both be I'll or made redundant at the same time). Is it worth getting some quotes? Also to ensure it reduces with the mortgage balance (if it's a repayment mortgage).

Oh, also meant to say that I am sure our mortgage company insisted on life insurance when we took out the mortgage ( although may be wrong here, a few years back so abut hazy)

Get him to check the details of the critical illness and income protection - especially the income protection. Most policies don't kick in until you've been unable to work for some weeks, and most only pay out for a limited period anyway. We've looked at many of these kind of policies over the years and they have never been worth it. We do, however, both have life assurance.