How much cover do you need?
Discussion
Just having a review of outgoings to make sure all are necessary and noticed that we spend a relatively high amount on life assurance policies.
I think just in relation to myself I have 3 different policies (plus my work one).
The work policy basically kicks in if I'm sick off work for more than 13 weeks and pays 75% of salary until I return (or for the rest of my working life if I don't return). It does not however pay out on death.
In addition to the above I have a life assurance policy that is enough to cover mortgage and any other outstanding amounts on death, as well as a policy that pays off my mortgage if I have a critical illness and another that provides my wife with a lump sum if I die.
I'm only 30 and fit (non smoker, light drinker, gym regularly, cycle to work and play football once a week) and as such I see no need to have more cover than the work one which will cover me if I have a 'critical' illness and a policy on death that'll cover all outgoings plus give my wife, say, £100k on top.
The question is does this sound like too much cover?
I think just in relation to myself I have 3 different policies (plus my work one).
The work policy basically kicks in if I'm sick off work for more than 13 weeks and pays 75% of salary until I return (or for the rest of my working life if I don't return). It does not however pay out on death.
In addition to the above I have a life assurance policy that is enough to cover mortgage and any other outstanding amounts on death, as well as a policy that pays off my mortgage if I have a critical illness and another that provides my wife with a lump sum if I die.
I'm only 30 and fit (non smoker, light drinker, gym regularly, cycle to work and play football once a week) and as such I see no need to have more cover than the work one which will cover me if I have a 'critical' illness and a policy on death that'll cover all outgoings plus give my wife, say, £100k on top.
The question is does this sound like too much cover?
mx stu said:
Just having a review of outgoings to make sure all are necessary and noticed that we spend a relatively high amount on life assurance policies.
I think just in relation to myself I have 3 different policies (plus my work one).
The work policy basically kicks in if I'm sick off work for more than 13 weeks and pays 75% of salary until I return (or for the rest of my working life if I don't return). It does not however pay out on death.
In addition to the above I have a life assurance policy that is enough to cover mortgage and any other outstanding amounts on death, as well as a policy that pays off my mortgage if I have a critical illness and another that provides my wife with a lump sum if I die.
I'm only 30 and fit (non smoker, light drinker, gym regularly, cycle to work and play football once a week) and as such I see no need to have more cover than the work one which will cover me if I have a 'critical' illness and a policy on death that'll cover all outgoings plus give my wife, say, £100k on top.
The question is does this sound like too much cover?
Yes and No - sorry.I think just in relation to myself I have 3 different policies (plus my work one).
The work policy basically kicks in if I'm sick off work for more than 13 weeks and pays 75% of salary until I return (or for the rest of my working life if I don't return). It does not however pay out on death.
In addition to the above I have a life assurance policy that is enough to cover mortgage and any other outstanding amounts on death, as well as a policy that pays off my mortgage if I have a critical illness and another that provides my wife with a lump sum if I die.
I'm only 30 and fit (non smoker, light drinker, gym regularly, cycle to work and play football once a week) and as such I see no need to have more cover than the work one which will cover me if I have a 'critical' illness and a policy on death that'll cover all outgoings plus give my wife, say, £100k on top.
The question is does this sound like too much cover?
There comes a level of Life Assurance that triggers all sorts of medical tests - doesn't sound like you've hit that.
The flipside is that you should overcover yourself at a young age - very low premiums - to build in future expansion in the later years ie family, bigger house with bigger mortgage, equity release for other projects etc.
Is the cup half empty or half full, really
sounds "normal" to me
you always have mortgage debt cover
generally good to have critical illness too - I had a car accident in my 30's and off work for 2 years, this paid out and saved a load of worry
employer offers some cover for death in service with pension etc - thats normal
I wouldnt cancel any of these, they are really the minimum Id want....
strange though how you are often worth more dead than alive...the missus would be a millionaire if you check out before your time
you always have mortgage debt cover
generally good to have critical illness too - I had a car accident in my 30's and off work for 2 years, this paid out and saved a load of worry
employer offers some cover for death in service with pension etc - thats normal
I wouldnt cancel any of these, they are really the minimum Id want....
strange though how you are often worth more dead than alive...the missus would be a millionaire if you check out before your time
Jockman said:
The flipside is that you should overcover yourself at a young age - very low premiums - to build in future expansion in the later years ie family, bigger house with bigger mortgage, equity release for other projects etc.
Thanks I think that's the route the IFA has taken when arranging a few years back, over cover. Out of interest what do insurers view as a 'young age' ?
mx stu said:
Out of interest what do insurers view as a 'young age' ?
6 months old ??? I honestly don't know what the brackets are.Out of interest I started a pension for my grandson (I'm 45) when he was 4 weeks old in January 2011. Put it on the Transact Platform with £80 from me and £20 from the Govt each month. The little critter's only gone and stuck some money into Emerging Makets
Essentially, you can never be too young
No such thing as too much cover in my opinion.
The minimum you should cover yourself for is for the amount of secured and unsecured debt you have. In addition to that you may want to think about your families loss of your income. The mortgage may be paid off but gas, electric, sky, petrol and overall living costs don't drop.
Ironically the worst thing that could happen to you is not to die but to get Criticially Ill. If you don't have CI and are unable to work for 4 or 5 years or maybe ever agian, what would you do then? Selling the house is an obvious option but would you want to do that whilst being critically ill etc??
It amazes me that people will pay £80-£90 a month for luxuries like Sky or Golf memberships etc but then feel that £30 or £40 a month on protecting your family "isn't affordable at the moment, we'll look at it again when we do the next mortgage...."
To the OP it sounds like you have most avenues covered and you should be pleased with the fact that you or your family are unlikely to ever suffer financial hardship due to any unfortunate events, rather than thinking your 'over' covered.
The minimum you should cover yourself for is for the amount of secured and unsecured debt you have. In addition to that you may want to think about your families loss of your income. The mortgage may be paid off but gas, electric, sky, petrol and overall living costs don't drop.
Ironically the worst thing that could happen to you is not to die but to get Criticially Ill. If you don't have CI and are unable to work for 4 or 5 years or maybe ever agian, what would you do then? Selling the house is an obvious option but would you want to do that whilst being critically ill etc??
It amazes me that people will pay £80-£90 a month for luxuries like Sky or Golf memberships etc but then feel that £30 or £40 a month on protecting your family "isn't affordable at the moment, we'll look at it again when we do the next mortgage...."
To the OP it sounds like you have most avenues covered and you should be pleased with the fact that you or your family are unlikely to ever suffer financial hardship due to any unfortunate events, rather than thinking your 'over' covered.
If you have the income protection policy which pays out potentially unit retirement age if you suffered an illness significant enough to stop you working for the rest of your life than for gods sake dont cancel it - especially if you took it out when you were younger - if you do and then want to take a similar policy out in the future it will be much more expensive and you are liable to have to jump through a million hoops to get the cover underwritten and accepted - and if you have had any medical issues in the meantime you can expect the premium to be "rated" ( Increased ) or potentially refused or certain conditions excluded.
Critical illness cover is quite nice to have, but a top-spec income protection policy ( which it sounds like you have ) is better really.
Life cover is cheap for the cover levels you get
As an ex-financial adviser I'd say you are pretty well protected.
Critical illness cover is quite nice to have, but a top-spec income protection policy ( which it sounds like you have ) is better really.
Life cover is cheap for the cover levels you get
As an ex-financial adviser I'd say you are pretty well protected.
Gassing Station | Finance | Top of Page | What's New | My Stuff