What insurances do you use?

Hedge

Hedge

Hedge

Soldato
Joined
18 Oct 2002
Posts
19,578
Location
Somewhere in the middle.
Life Insurance,
Income Protection Insurance,
Critical Illness cover etc.

When we got our mortgage over a year ago we got sold some income protection and critical illness cover for my GF, (i already have decent enough cover through work) however I just realised it adds up to like £70+ per month so we just phoned to cancel it.

Now we may shop around if we decide to renew it, but I dont think its that necessary as my GF is clever enough to get a new job quite quickly in the event of being made unemployed.

So what cover/insurances do you homeowners pay for?

I dont wanna be paying lots of money for stuff that I can live without.
 
I've recently done all of this and have a rather comprehensive package.

Me and my partner have a joint life insurance policy that is enough to cover off the mortgage from day one. This is level term (As in it always pays out the full amount from year 1 rather than decreasing year by year) and is index linked.

This is then coupled with both of us having an individual life and critical illness policy. Again this pays out if either of us dies on top of the joint, but also pays out if either of us have a critical illness. My partners is enough to cover the entire mortgage in either respect and mine is significantly less for reasons explained below.

All life / critical illness covers run up until we hit about 60, by which time the mortgage should be long paid off.

As I'm the main earner in the household I also have income protection insurance. This is actually split into two separate policies and covers me up until I hit 60ish (it might be 65). These in my opinion are the important ones. Again they are index linked so they will always be worth the same as todays money and they are whats known as "guaranteed". Essentially they will pay out for any reason that stops me from doing my current job rather than being forced into something in the same industry or into "any job" in the cheapest covers. I've designed these to compliment my sick pay which is the reason I have two policies. One kicks it at 6 months (At which point my sick pay drops to half) and covers about 30% of my salary (which added to the half sick pay keeps me at 80% of my income) at month 12 the second policy kicks in (At which point my sick pay drops to 0) which covers 50% of my salary keeping me at that magic 80% mark. These policies both pay out until I hit 60ish or I can return to work.

This might sound like overkill but it's all been carefully designed to cover any situation. If either one of us die the mortgage can be paid off instantly and when work life cover is added onto this there would be enough money left over that neither of us should ever have to truly "worry" about money again. The critical illness cover for myself is designed to be a lump payment to cover any immediate issue, and then the income protection insurance kicks in to cover my monthly outgoings until I recover, hit retirement age, or die (At which point the joint life kicks in). My partners critical illness cover is much higher so that it covers anything immediate and should have some left over as income protection wasn't an option for her.

The beauty of having the 3 separate policies also means that should one of us die, then the other be hit by a critical illness later in life there would still be something to pay out for each of us.

This probably comes int at around the £70 a month you were paying but it gives me a hell of a lot of cover and in theory means there is no situation that we shouldn't be able to cope with. After having worked with someone who was in a car accident taking him out of work for years and seeing the issues they went through not being able to afford mortgage payments etc it's a small price to pay for the piece of mind it offers.
 
That's a very good reply. Gives me some stuff to think of. Especially considering we've been paying 70+.
 
Hedge said:
however I just realised it adds up to like £70+ per month so we just phoned to cancel it.
Click to expand...

Side tracking slightly but did you take that out through your mortgage broker? If so, did you check if there's any clawback if you cancel it before a set term?

If we took out life assurance through our mortgage broker, we would have to pay his full commission, which was quoted at around £3000, if we cancelled it within 5 years. For that reason alone we didn't take it out through him as I didn't want to be tied in like that. This seems to bite a lot of people on the bum as they didn't realise they were tied in like that and end up getting a bill through their door.

I do need to get around to sorting this out for us so I'll keep an eye on the topic for similarly great replies like BinnsY!
 
Dynix said:
Side tracking slightly but did you take that out through your mortgage broker? If so, did you check if there's any clawback if you cancel it before a set term?

If we took out life assurance through our mortgage broker, we would have to pay his full commission, which was quoted at around £3000, if we cancelled it within 5 years. For that reason alone we didn't take it out through him as I didn't want to be tied in like that. This seems to bite a lot of people on the bum as they didn't realise they were tied in like that and end up getting a bill through their door.

I do need to get around to sorting this out for us so I'll keep an eye on the topic for similarly great replies like BinnsY!
Click to expand...

Youve mentioned this and now I'm kinda freaking out. I cant find anywhere it lists the set term, we did get it through the broker and its been just over a year now. WTF did I pay him for in the first place then :(.

Oh dear.
 
Hedge said:
Youve mentioned this and now I'm kinda freaking out. I cant find anywhere it lists the set term, we did get it through the broker and its been just over a year now. WTF did I pay him for in the first place then :(.

Oh dear.
Click to expand...

Ah, sorry to scare you :( Ours didn't mention any kind of clawback but I read plenty of horror stories, so when he sent over the life assurance quote, I made sure to do my own research and found out it would have been a 4 (not 5 as I thought - just checked) year clawback (it would have been with Royal London) and politely declined the quote. They really should be upfront about this.

Do a quick search for "[provider] clawback" and see if anything pops up.
 
I am really not into buying insurance products,

I have a token buildings/contents insurance policy for our house (cheap rubbish one, but good enough to rebuild the house and replace some basics). I often let this lapse to be honest as its so unlikely to ever be claimed upon, but then i get paranoid about fire and rebuild costs.

Car insurance for our cars (legal necessity & 3rd party potential damages are the only reasons for this really) Very unlikely to be claimed upon by ourselves.
 
Me and my partner have got a joint life insurance 200k and I seperatly have got life insurance with critical illness 110k. I work for the NHS, so we get quite a fair bit of benefits like full sick pay depending on service. Incase of my death whilst driving to work or being at work, my employer would payout a death in service of 2 yrs full annual income.

I pay 18.95 and 21.55. We do not currently have house insurance which is pretty stupid.

I also pay 14.95 for cat insurance and 12£/m for his flea treatment, nurse appointments etc...

I have been thinking about cancelling it, but he was just hit by a car the other week ( 8 out of 9 livest left ).. So I better keep it...

M
 
Basically it pays for products, in a monthly installment. Fleatreatment, worming , nursing appointment, two vet checks per yr etc... He gets treated better than us!
 
None of that. We have buildings & contents home insurance which costs around £80 per year. I figure this is worth having because it is a terraced house meaning that even if we do everything perfectly, a fire in a neighbour's property could destroy our house/belongings, not to mention burglary etc.

Not really a fan of insurance for the sake of it because it just reduces the amount of money you have to spend on other stuff. Obviously if something bad happens then it will prove worthwhile but the way I see it is it is kind of a lose-lose situation; either I pay out premiums and get nothing at the end of it, or if we get some cash it must be as a result of something bad happening (home insurance I view differently because cash can replace my house/possessions, it can't replace my life/health).
 
Ultimately with a patten of insurance like mine your paying for peace of mind.

There is nothing I could do with £70 a month that would paticuarely improve my life day to day in any measurable way. But should the worse happen and I loose my health meaning I can't work I have a guarenteed income meaning I can concentrate purely on trying to get better without having to worry about money as well.

I get the "it's a loose loose situation" view, but its the size of the loss thats different. If you have no insurance and are in some kind of accident that causes you (and potentially your partner) to suffer a life changing injury, the last thing you want is to have to worry about where the mortgage payment is coming from, or how you put food on the table. If you're covered with insurance then yes, you've still lost the most important aspect, but at least you can concentrate purely on getting that back.
 
I guess it depends on the finances of the people involved and work benefits etc. We don't have a mortgage and I get critical illness (admittedly capped at £150k) and income protection (75% of salary) through my employer. Coupled with savings I don't forsee finances being a worry at least in the short to medium term.

To be honest if we had life changing injuries the last thing I would want to be doing would be going through the admin ballache of trying to claim on another insurance policy. It would just be another hassle to deal with and I'd probably get more peace of mind from knowing I wouldn't have to deal with that. When my mother died I know my father got thoroughly fed up trying to sort out all the insurance, banking etc and the thoroughly impersonal nature of it all.

To be clear I completely understand why others take insurance and respect their decisions, I just prefer to keep costs down and provide for myself (the way I see it, if you avoid years of insurance premiums then that means you'll have bigger savings to fall back on in the event of a disaster - of course the gamble with insurance depends on whether you get back more in claim payments than you put in in premiums).
 
Ive got life insurance if I die. It will nearly clear the mortgage but on top of that I have a death in service from work that will clear the rest of the mortgage and leave the missus with about £70k or so.

I have full whack on house insurance. My parents had the same idea and 1 claim in 30 odd years means it was worth new for old as there was a burglary years ago and loads of jewellery electronics etc was taken and the price to replace it was far, far above what they would have paid out otherwise

FluffySheep
 
My most expensive insurance product? The dog! £48 a month, the previous insurers wanted £75! Luckily he has no pre-existing illnesses as once you have one ot those you're stuck with the company for life and at their mercy with regards to pricing.

Other than that we have buldings and contents, actually claimed a new floor off them when the washer leaked. Didn't have any effect on future premium amazingly.

We both have life cover for the mortgage and I'm looking at getting critical illness actually too.
 
you need building insurance if you have a mortgage so you may as well pay the little extra on top for contents insurance too. you should have a really good alarm and cctv system to deter theft in the first place. which should also reduce your premium by a bit so the kit pays for itself over time plus better chance of the thieves being caught with an alarm and cctv.

life insurance, critical illness cover, etc I don't see the point personally. Take that £70 a month and put it towards your mortgage. People are healthier and living longer so play the odds it's rare you will use/need it. It also usually gets more expensive the older you get and pays out less. the insurance companies aren't stupid otherwise they would have went bust a long time ago.

After listening to others paying £50 a month on their pet, etc then I don't feel so bad about the few monthly subs I have.
 
The important thing to remember is that if you start these kinds of policies in your early to mid 20's and then keep them for life they start cheap and stay comparatively cheap. All of my policies are "guaranteed" for their policy length so there is no requirement to have a medical or face unexpected price increases later in life. The cost can be increased each year in line with RPI + a certain % (it's low but I cant remember exactly what) but the amounts they pay out every year are increased in line with the RPI as well so the price increases are very small.

Whilst I somewhat agree with possibly taking the risk on life / critical illness the one most people forget is income protection insurance. This is quite possibly the most phenomenal insurance there is in my opinion and the one everyone should have if possible. Whereas life / critical illness will only pay out if the very worst happens, income protection pays out if just about anything stops you from working. If you tailor it to match your sick pay the premiums can be relatively low and you know you have a safety net no matter what happens. My biggest annoyance with critical illness is that nothing fits if you have a big accident, say for example a car crash leaving you out of work but with no "critical illness" whereas in that case income protection would step in.

The which articles on it are a pretty good read.

http://www.which.co.uk/money/insurance/reviews-ns/income-protection/what-is-income-protection/
 
I will have buildings insurance (for when I buy my house). Also had contents insurance for the last 5 years but never claimed.

As for income protection etc I get a good deal from my work, and as we're both young (24/27), with no kids I don't want her to have too good a time if I die! :p (I'll probably get it before she's 30 so the premiums are lower)
 
You must log in or register to reply here.
Back
Top Bottom