So I'm in the middle of buying my first house and I'm at the stage where I need to start applying for life insurance. I think I have a plan of what I'm going to go for but I'm curious what kind of setups others have and what they think of my possible plan?
So a little bit of background, its myself and my partner, we are on a combined income of around 50k and the mortgage we have gone for should be comfortably affordable. We are both in our mid 20's.
Essentially we are thinking of doing a combination of life / critical illness cover as well as income protection insurance. The start of this is a basic joint life insurance policy covering our full mortgage amount for the full term. This will be on a decreasing term so is literally just to pay off the mortgage should one of us die. On top of this we will have a 50k combined life / critical illness cover policy each. Essentially this means should one of us die the mortgage is covered and there is 50k in cash to the survivor. It also means should one of us ever suffer from a critical illness we get 50k to help support us, and the other policy is still running should the other end up dying or critically ill as well. All in this comes to about £25 a month so seems like a good deal.
On top of that we are thinking of doing an income protection insurance policy each as well. From my research this seems to be one of the best, and one of the most under insured policies there is. The policies would pay each of us about 65% of our normal monthly income should we not be able to work through illness or injury and is completely separate from the life insurance. These policies would be index linked, with guaranteed premiums, and would pay the income every month we can't work until we hit 65. They also have an "own occupation" clause so we wouldn't be forced into minimum pay jobs instead. The policies don't kick in for the first 6 months but we both get sick pay through work so that shouldn't be a problem. Both of these together comes to about £30 a month.
The logic behind this is that if one of us dies, the mortgage is paid off and there is a decent pay out to cover any unforeseen expenses as well (we both have death in service benefits as well but I haven't included this in case one of us is unemployed and we die). But if one of us were ever critically ill or in a major accident, there is a smaller lump payment to help us get through the time, and a guaranteed monthly income until we can get back to work thanks to the income protection cover. The 65% figure has been chosen as that's what we think we could get by on. We certainly wouldn't live as comfortably as we will when we are working, but we also won't be out on the street or at any risk of loosing our home.
I think this is a pretty good combo but any ideas / input as to something we could do better would be appreciated
So a little bit of background, its myself and my partner, we are on a combined income of around 50k and the mortgage we have gone for should be comfortably affordable. We are both in our mid 20's.
Essentially we are thinking of doing a combination of life / critical illness cover as well as income protection insurance. The start of this is a basic joint life insurance policy covering our full mortgage amount for the full term. This will be on a decreasing term so is literally just to pay off the mortgage should one of us die. On top of this we will have a 50k combined life / critical illness cover policy each. Essentially this means should one of us die the mortgage is covered and there is 50k in cash to the survivor. It also means should one of us ever suffer from a critical illness we get 50k to help support us, and the other policy is still running should the other end up dying or critically ill as well. All in this comes to about £25 a month so seems like a good deal.
On top of that we are thinking of doing an income protection insurance policy each as well. From my research this seems to be one of the best, and one of the most under insured policies there is. The policies would pay each of us about 65% of our normal monthly income should we not be able to work through illness or injury and is completely separate from the life insurance. These policies would be index linked, with guaranteed premiums, and would pay the income every month we can't work until we hit 65. They also have an "own occupation" clause so we wouldn't be forced into minimum pay jobs instead. The policies don't kick in for the first 6 months but we both get sick pay through work so that shouldn't be a problem. Both of these together comes to about £30 a month.
The logic behind this is that if one of us dies, the mortgage is paid off and there is a decent pay out to cover any unforeseen expenses as well (we both have death in service benefits as well but I haven't included this in case one of us is unemployed and we die). But if one of us were ever critically ill or in a major accident, there is a smaller lump payment to help us get through the time, and a guaranteed monthly income until we can get back to work thanks to the income protection cover. The 65% figure has been chosen as that's what we think we could get by on. We certainly wouldn't live as comfortably as we will when we are working, but we also won't be out on the street or at any risk of loosing our home.
I think this is a pretty good combo but any ideas / input as to something we could do better would be appreciated
) 
