Impending fatherhood, what insurance to get?
Discussion
In a nutshell: I'm expecting my first child in December, and the mind has started to wander on to all things sensible and befitting of a family man, such as buying a Volvo estate and trying to find a way of hanging on to my M5. I also want to protect my other half and offspring should the following happen: death, redundancy, critical illness, serious accident. What products do I need to consider? I have a mortgage on a house which is rented out, but we don't currently own a house together, although will look to buy in 18 months. I'm hopng there are a few non-shark IFAs on here who might be able to point me in the right direction....
tjk123 said:
In a nutshell: I'm expecting my first child in December, and the mind has started to wander on to all things sensible and befitting of a family man, such as buying a Volvo estate and trying to find a way of hanging on to my M5. I also want to protect my other half and offspring should the following happen: death, redundancy, critical illness, serious accident. What products do I need to consider? I have a mortgage on a house which is rented out, but we don't currently own a house together, although will look to buy in 18 months. I'm hopng there are a few non-shark IFAs on here who might be able to point me in the right direction....
I can help if you want a chat? 
tjk123 said:
In a nutshell: I'm expecting my first child in December, and the mind has started to wander on to all things sensible and befitting of a family man, such as buying a Volvo estate and trying to find a way of hanging on to my M5. I also want to protect my other half and offspring should the following happen: death, redundancy, critical illness, serious accident. What products do I need to consider? I have a mortgage on a house which is rented out, but we don't currently own a house together, although will look to buy in 18 months. I'm hopng there are a few non-shark IFAs on here who might be able to point me in the right direction....
Nice one, congrats. I posted my thoughts here, on 1 July.http://www.pistonheads.com/gassing/topic.asp?h=0&a...
Edited by Ginge R on Friday 11th July 00:12
Two priorities.
Family income benefit.This is life insurance that instead of paying out a lump sum, pays out so much a month if you die, for the period you set it for, so you would set if for an amount you would want them to have to live on, over say 21 years until after uni age. Not at all expensive if young, no health issues and non smoker.
Income protection or permanent health insurance - pays out amount per month set at start usually 50-55% of your salary tax free every month if you can not work through illness or accident, set up to start when work sick pay finishes, set up on own occupation basis, index link it to RPI, if possible make sure its with a company that will give guaranteed premiums that also only increase with RPI (many increase faster)
This will pay out until you get better or until you retire at say 67 (if set until then)
Better than critical illness, as covers all illnesses not just a select few.
Set these up right now, while young and premiums relatively cheap (and you are likely to have less health issues ) and you will probably never need to change them.
Family income benefit.This is life insurance that instead of paying out a lump sum, pays out so much a month if you die, for the period you set it for, so you would set if for an amount you would want them to have to live on, over say 21 years until after uni age. Not at all expensive if young, no health issues and non smoker.
Income protection or permanent health insurance - pays out amount per month set at start usually 50-55% of your salary tax free every month if you can not work through illness or accident, set up to start when work sick pay finishes, set up on own occupation basis, index link it to RPI, if possible make sure its with a company that will give guaranteed premiums that also only increase with RPI (many increase faster)
This will pay out until you get better or until you retire at say 67 (if set until then)
Better than critical illness, as covers all illnesses not just a select few.
Set these up right now, while young and premiums relatively cheap (and you are likely to have less health issues ) and you will probably never need to change them.
Stevemr said:
Set these up right now, while young and premiums relatively cheap (and you are likely to have less health issues ) and you will probably never need to change them.
Correct. Think ahead too. Your debts may increase as you get older and you move up the housing scale. Tie in to higher life cover than you require if there is only a minimal increase in premium. Oh, and stop being selfish
Get your new born a pension straight away with a small monthly drip, added to by the Government. Then you will evidence the beauty that is compound interest. And don't name your child Fang or Zorb or any other name you kids see on your XBoxes
Re Steve - agreed, Family Income Benefit is much overlooked. Also, review your Guaranteed Insurability - a clause in an insurance contract which lets you increase level of cover without providing further medical evidence. I have pasted a generic summary from a couple of providers.
http://www.legalandgeneral.com/advisercentre/prote...
http://www.pruadviser.co.uk/content/nav/about/2667...
Many people I speak with have this and don't know it so if your circumstances have recently changed (just married/partnered/bigger family/more expensive home or mortgage etc) then start looking at your policy terms and conditions. If you're buying cover and think it might be a good idea, ask if your intended policy has this feature and if you don't need bigger cover in the future, just check you're not paying extra you don't want it.
Always though, if you have just had a child or have inbound, and already have an insurance policy gathering dust in a drawer somewhere, check your policy. This sort of feature is potentially gold dust if you bought cover very young but have waited quite a while before starting a family or have started a second one long after the first has grown up, possibly by a second relationship.
And don't forget to take into account any occupational death in service benefits. You lose them if you move or finish working, but are those benefits relevant?
http://www.legalandgeneral.com/advisercentre/prote...
http://www.pruadviser.co.uk/content/nav/about/2667...
Many people I speak with have this and don't know it so if your circumstances have recently changed (just married/partnered/bigger family/more expensive home or mortgage etc) then start looking at your policy terms and conditions. If you're buying cover and think it might be a good idea, ask if your intended policy has this feature and if you don't need bigger cover in the future, just check you're not paying extra you don't want it.
Always though, if you have just had a child or have inbound, and already have an insurance policy gathering dust in a drawer somewhere, check your policy. This sort of feature is potentially gold dust if you bought cover very young but have waited quite a while before starting a family or have started a second one long after the first has grown up, possibly by a second relationship.
And don't forget to take into account any occupational death in service benefits. You lose them if you move or finish working, but are those benefits relevant?
The problem I had was actually paying for the insurance. Given that my wife became a full time mother when we had kids, the cost of insurance would have come out of a budget that wouldn't actually stretch to the end of the month. So just had life insurance as required by mortgage company.
Stevemr said:
Two priorities.
Family income benefit.This is life insurance that instead of paying out a lump sum, pays out so much a month if you die, for the period you set it for, so you would set if for an amount you would want them to have to live on, over say 21 years until after uni age. Not at all expensive if young, no health issues and non smoker.
Income protection or permanent health insurance - pays out amount per month set at start usually 50-55% of your salary tax free every month if you can not work through illness or accident, set up to start when work sick pay finishes, set up on own occupation basis, index link it to RPI, if possible make sure its with a company that will give guaranteed premiums that also only increase with RPI (many increase faster)
This will pay out until you get better or until you retire at say 67 (if set until then)
Better than critical illness, as covers all illnesses not just a select few.
Set these up right now, while young and premiums relatively cheap (and you are likely to have less health issues ) and you will probably never need to change them.
Useful post, thanks. Is there an income protection/ PHI policy you can bundle with one that covers you for redundancy/ job loss too?Family income benefit.This is life insurance that instead of paying out a lump sum, pays out so much a month if you die, for the period you set it for, so you would set if for an amount you would want them to have to live on, over say 21 years until after uni age. Not at all expensive if young, no health issues and non smoker.
Income protection or permanent health insurance - pays out amount per month set at start usually 50-55% of your salary tax free every month if you can not work through illness or accident, set up to start when work sick pay finishes, set up on own occupation basis, index link it to RPI, if possible make sure its with a company that will give guaranteed premiums that also only increase with RPI (many increase faster)
This will pay out until you get better or until you retire at say 67 (if set until then)
Better than critical illness, as covers all illnesses not just a select few.
Set these up right now, while young and premiums relatively cheap (and you are likely to have less health issues ) and you will probably never need to change them.
Jockman said:
Correct. Think ahead too. Your debts may increase as you get older and you move up the housing scale. Tie in to higher life cover than you require if there is only a minimal increase in premium.
Oh, and stop being selfish Get your new born a pension straight away with a small monthly drip, added to by the Government. Then you will evidence the beauty that is compound interest.
And don't name your child Fang or Zorb or any other name you kids see on your XBoxes
Haha, I'm not that young (35) although do own an Xbox. Am investigating the pension thing.Oh, and stop being selfish
Get your new born a pension straight away with a small monthly drip, added to by the Government. Then you will evidence the beauty that is compound interest. And don't name your child Fang or Zorb or any other name you kids see on your XBoxes
Frankly after a few weeks you'll be so tired you'll envy the dead - so check the section on any policy that covers suicide...
I need to sort out the same thing, so thanks for all the info provided to the OP, best to sort this out before Baby arrives - have to keep reminding myself to drive on the left and this morning I left the house in odd trainers for work.
I need to sort out the same thing, so thanks for all the info provided to the OP, best to sort this out before Baby arrives - have to keep reminding myself to drive on the left and this morning I left the house in odd trainers for work.
I remember once, getting my eldest for a trip to the shops, putting her in the babyseat in the car on the drive, heading back indoors to look for my wallet etc and then completely forgetting all about her for the best part of an hour as I stumbled about totally braindead after yet another night without sleep.
Added; When the next lot (yup) came along I spent much time away, most noticably in Brunei doing the Jungle Warfare Instructors Course - possibly the most intensive regular course that an infanteer can do. I remember sleeping in my atap after the latest swamp march, shattered, soaked, exhausted, brain dead, numb with fatigue, aching, covered from head to toe in sores, sweat rashes and god knows what else, completely ball bagged etc and *still* thinking that it was easier than raising kids.
Added; When the next lot (yup) came along I spent much time away, most noticably in Brunei doing the Jungle Warfare Instructors Course - possibly the most intensive regular course that an infanteer can do. I remember sleeping in my atap after the latest swamp march, shattered, soaked, exhausted, brain dead, numb with fatigue, aching, covered from head to toe in sores, sweat rashes and god knows what else, completely ball bagged etc and *still* thinking that it was easier than raising kids.
Edited by Ginge R on Monday 14th July 19:34
Non tax payers can save up to £3600 gross per annum (£2880 net contribution) and that includes newborns. Compounding the growth has a huge beneficial impact. The big risk I suppose, is not knowing what the pension wrapper will offer in terms of legislative and political rusk alone by the time a toddler retires.
Risk, rusk.. see what I did there??!!
Risk, rusk.. see what I did there??!!
Ginge R said:
Non tax payers can save up to £3600 gross per annum (£2880 net contribution) and that includes newborns. Compounding the growth has a huge beneficial impact. The big risk I suppose, is not knowing what the pension wrapper will offer in terms of legislative and political rusk alone by the time a toddler retires.
Risk, rusk.. see what I did there??!!
I wasn't aware of that incentive 25% instant return to the fund Risk, rusk.. see what I did there??!!
Actually as the wife doesn't work this might be a smart move too hmm
If the male bread winner is quite a high earner then usually most money goes towards him, and that can make sense a outset. After all, net adjusted income after pension contributions can recover child benefit if it drops to £50,000 pa. And everyone on PH is a managing director on 120k, right?!
But the budget has also allowed anyone to have three small pots of £10,000 and one of £30,000 to be taken in a flexible, efficient and easy manner. As ever, the trick is in identifying the big picture, the objectives and getting the balance right. It can suit (typically) a non tax paying spouse who raises the kids, yes. Have a chat with an adviser you trust if you need a steer.
But the budget has also allowed anyone to have three small pots of £10,000 and one of £30,000 to be taken in a flexible, efficient and easy manner. As ever, the trick is in identifying the big picture, the objectives and getting the balance right. It can suit (typically) a non tax paying spouse who raises the kids, yes. Have a chat with an adviser you trust if you need a steer.
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