health insurance vs pension
Discussion
advice please
i pay roughly four times as much towards health insurance as i do towards my pension.
i am approaching 62
do i keep paying towards my health insurance or cancel it and put the money elsewhere, i know there is a risk
do i take a 25% lump sum from my pension and put that somewhere else as well, the idea being i might be better off doing it that way for when i have retired. or am i asking the wrong questions and there is something more obvious i should be doing?
thanks in advance
i pay roughly four times as much towards health insurance as i do towards my pension.
i am approaching 62
do i keep paying towards my health insurance or cancel it and put the money elsewhere, i know there is a risk
do i take a 25% lump sum from my pension and put that somewhere else as well, the idea being i might be better off doing it that way for when i have retired. or am i asking the wrong questions and there is something more obvious i should be doing?
thanks in advance
Lester,
Is anyone reliant on you for income which might be lost in the event of you falling ill? If so, what's the exposure, are you currently over/underinsured? You refer to paying four times as much into insurance as retirement planning - how much do you set aside for your pension each month - do you need to do that? Finally, have you shopped around for cheaper insurance cover if you think you do need it?
Is anyone reliant on you for income which might be lost in the event of you falling ill? If so, what's the exposure, are you currently over/underinsured? You refer to paying four times as much into insurance as retirement planning - how much do you set aside for your pension each month - do you need to do that? Finally, have you shopped around for cheaper insurance cover if you think you do need it?
Ging
thanks for taking the time to reply
No no one is reliant on me for income, my partner is reasonably well off and we live seperately.
Nothing will be lost if i fall ill except my mortgage payments, but id have to be very very ill, and i havent had a day off ill in 25 years, 2 knee ops a back op and a hernia op is the only time i havent been able to work, and im lucky enough that my bosses are also my friends and im pretty sure something could be worked out.
I have had a pension since i was 20 but never really upped it higher than £100 a month, daft i know. My health insurance is £400 a month and has my son on it who is estranged but his cover is only £25 a month from that £400.
I doubt if I could shop around for cheaper insurance, I have had knee operations and a back operation so im not sure how the moratorium would come into it, ive been with my health company and paid about £70k + to them. im just not sure if I should keep the status quo
thanks
Lester
thanks for taking the time to reply
No no one is reliant on me for income, my partner is reasonably well off and we live seperately.
Nothing will be lost if i fall ill except my mortgage payments, but id have to be very very ill, and i havent had a day off ill in 25 years, 2 knee ops a back op and a hernia op is the only time i havent been able to work, and im lucky enough that my bosses are also my friends and im pretty sure something could be worked out.
I have had a pension since i was 20 but never really upped it higher than £100 a month, daft i know. My health insurance is £400 a month and has my son on it who is estranged but his cover is only £25 a month from that £400.
I doubt if I could shop around for cheaper insurance, I have had knee operations and a back operation so im not sure how the moratorium would come into it, ive been with my health company and paid about £70k + to them. im just not sure if I should keep the status quo
thanks
Lester
Ok, lets look at this objectively. What's the mortgage balance, length of term to run and monthly payment?
If you want an emergency fund and saved £400 pm into that instead, how much of a fund would you reasonably soon have that you could rely on until you were better? Or, if you, at 62, saved the £400 into the pension safe cash fund and boosted it with tax relief, could you then draw income from that to cover the mortgage? If you have no estate or dependents, jn orinciple, can you get a cheaper mortgage?
I am not advocating this for you, but in principle, why wouldn't the sweet spot for you have been a long, cheap interest only mortgage - after all, the house isn't a investment for your future, its a shelter for your bed that needs to be funded cheaply and still allows you to enjoy life. In essence, do you really need to have the mortgage paid off asap? It would be a bummer if you did without now, and then needed long term care from the state and lost your home due to it being an asset which then gets taken into account by social services and financially counts against you. Can you shop around for more appropriate cover?
Is the cover too much (are you over insured?) or is it pricy because of your medical conditions? That would probably preclude you from re insuring. Do you have any exclusions in the policy which means the cover wouldn't apply anyway if one of the conditions that might be liable to trigger loss of income in the first place?
If you want an emergency fund and saved £400 pm into that instead, how much of a fund would you reasonably soon have that you could rely on until you were better? Or, if you, at 62, saved the £400 into the pension safe cash fund and boosted it with tax relief, could you then draw income from that to cover the mortgage? If you have no estate or dependents, jn orinciple, can you get a cheaper mortgage?
I am not advocating this for you, but in principle, why wouldn't the sweet spot for you have been a long, cheap interest only mortgage - after all, the house isn't a investment for your future, its a shelter for your bed that needs to be funded cheaply and still allows you to enjoy life. In essence, do you really need to have the mortgage paid off asap? It would be a bummer if you did without now, and then needed long term care from the state and lost your home due to it being an asset which then gets taken into account by social services and financially counts against you. Can you shop around for more appropriate cover?
Is the cover too much (are you over insured?) or is it pricy because of your medical conditions? That would probably preclude you from re insuring. Do you have any exclusions in the policy which means the cover wouldn't apply anyway if one of the conditions that might be liable to trigger loss of income in the first place?
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