Insurance

thomasross20

Just sorted out a mortgage deal. 

Guy tried to sell me some insurance but it sounded expensive. Curious as to what insurance you have and how much you reckon it should cost. I'll be looking at:

Buildings and contents (get rid of NewMoon?).
Income Protection.
Critical Illness.

Others?
I'll tell you the total of those 3 came to about £200 from the quote..... So I left alone for now. Just curious what you take out because not everybody takes them all, or any, out!

Sporky

Get buildings and contents and separate life insurance - enough life insurance to pay off the mortgage, any funeral expenses and to tide your dependents over.

thomasross20

Do you not bother with income protection? I guess like many jobs, mine can be volatile... So I'd worry if they shut our design centre and I was out of a job.

MtB

I have always had income protection / critical illness - currently with LV. I'm in my mid fifties and it costs about sixty quid a month. If I'm unable to continue doing my normal job through illness I will be paid a sum equivalent to my salary until my retirement date. I've never had life insurance as I've always been on my own, and the sale of the house would pay (and would have always paid) off all of the mortgage and debits.   

The key part is making sure that your covered for doing your "normal job" (only), as I'm lead to believe that some schemes will have you doing other types of work, so they don't have to pay out / or can pay less.

fretmeister

Don't get rid of New Moon. Most house type policies don't cover enough for guitars. Often they'll have quite low Single Article Limits.

Sporky

thomasross20 said:

Do you not bother with income protection? I guess like many jobs, mine can be volatile... So I'd worry if they shut our design centre and I was out of a job.

I've not, though I have it from work now. It comes down to how easily you could get another job...

thomasross20

Ok good advice, thanks! 

TTony

Sporky said:

thomasross20 said:

Do you not bother with income protection? I guess like many jobs, mine can be volatile... So I'd worry if they shut our design centre and I was out of a job.

I've not, though I have it from work now. It comes down to how easily you could get another job...

And how much spare funds you have in the bank (which is essentially self-insurance).

Buildings cover is normally a requirement of the mortgage provider.  They're lending you the money against the value of the property.  Hence, if anything happened to the property, they'll need to know that their security is protected.

Contents insurance is extremely sensible, Accidental Damage cover is a typical add-on that you might want if you're particularly accident prone or careless.

Cover for your guitars is probably best arranged separately as many domestic contents policies will either exclude high value instruments, or cover them only when in the house, or when declared (and priced) separately - which is effectively a separate policy.

uncledick

I use Direct Line for house / contents and they seem fine.  Actually they were excellent when I shattered my leg in the Alps - even paid out more than I asked for.  LV for life assurance just to cover the mortgage but critical illness has always been stupidly expensive so I've never bothered.  Even if your current employer goes belly up there are plenty of jobs around for people who are even remotely adaptable and can speak in sentences.  

thomasross20

Quoted critical illness was £55 a month. Said it covered immediate family but after marriage her girls will be step-daughters, not technically immediate family, I think. 

Separate cover for instruments - I'll stick with that then. 
I'm with DirectLine for the car - will check them out... 

chrispy108

I'd be amazed if the critical illness didn't pay out to step-daughters. Obviously you need to check, but that would be within most people's definition of immediate family.

boogieman

We've just done our house and contents with Direct Line. They were about a third the cost of a renewal with our last company. 

axisus

I've wasted money on income protection my whole life. Been meaning to stop it for the past few years but never seem to get around to it. 

DefaultM

I would get the insurances, but go to a broker and they will be able to get you way better cover for a lot cheaper. A lot of them have exclusive deals. What I got was far better than anything I could have got myself online.
Also in your current situation it will give you less to worry about as they sort it for you.

Critical illness is generally very expensive, and often you can get an income protection policy that will cover you anyway if you're wanting a monthly income.

My income protection is about £20 a month and covers 2/3rds of my wage if I can't work due to accident or sickness.
If I get a critical illness then I can claim on my income protection.
Its a very good policy. It doesn't pay out for the first 6 months because I get 6 months sick pay with work, so that has made the premium cheaper. Then after 6 months it pays out indefinitely. So say I get an illness and can never work again, it will keep paying me until I die.

Then I've got unemployment cover which is £17 a month. If I'm made redundant then I get £700 a month to cover mortgage plus expenses. That covers for a maximum of 12 months though.

Life cover which would pay off the mortgage only is £6.

Then I got buildings and contents with morethan as the broker was too expensive. Thats £20 a month for up to £1m buildings and £100k contents.

I've got all my music gear insured with Allianz for £25 a month. 

So about £90 and its all excellent cover. There is so point in buying cheap shit because it won't pay out, however there also no need to spend a fortune either.

thomasross20

Through work I get 6x salary life cover. 
And some illness cover. 
-> Those are only if I'm with this employer, of course. 
Sheena took out separate life insurance (2 policies) years ago and she's glad she did for her kids' sake. 

Unemployment cover... that's a good one. Man, I need to check all this out by Monday. 
I don't want to spend over £100 all-in... I'll get on the case. 

Rickyd

Thomas, on the assumption that it's a capital repayment mortgage (you're repaying capital and interest each month), you need decreasing term assurance which is cheap as chips. Go to a broker who will get you the best deal and also advise about putting a trust in place if necessary. Critical Illness cover can be expensive, again a broker will shop around and find good cover at a competitive premium. Income protection will give maximum cover of 50%-60% of your salary, but if your employer will pay you for a certain amount of time you can offset this against the policy which will reduce the cost. Make sure that any work benefits (life cover, pensions) are "nominated" which means the money will not be paid to your estate and possibly liable to Inheritance Tax.

thomasross20

Thanks for that!
Just trying online calcs right now for buildings & contents but they all require address and house number. We don't have that info yet... but I need to get this sorted for Monday. Err.....

Iamnobody

thomasross20 said:

Thanks for that!
Just trying online calcs right now for buildings & contents but they all require address and house number. We don't have that info yet... but I need to get this sorted for Monday. Err.....

Morning. Don't worry about buildings and contents insurance yet, give your self a moment to relax. It was nearly 1am when you posted that - please don't burn yourself out.

When it's required I doubt it will cost you more than £150-300 for the year. You don't need this policy to start until to move in a few months so pointless getting quotes now as they wont be valid then.

With everything you have going on at the moment this one can wait.

Why Monday?

thomasross20

So much to remember, I forget but the mortgage advisor who was pushing the 3 types of insurance said I'd need one for sure, which I think is buildings.. but yeah, if the house isn't ready until then, do I really need it now....
You're all totally right - total overload !

richardhomer

thomasross20 said:

So much to remember, I forget but the mortgage advisor who was pushing the 3 types of insurance said I'd need one for sure, which I think is buildings.. but yeah, if the house isn't ready until then, do I really need it now....
You're all totally right - total overload !

You insure the building from exchange of contracts (missives in Scotland).

If 6 x salary covers your mortgage, there is no need for further life cover. I appreciate this ceases if the job does - but the chances are that any comparable work would include it as part of the salary package. Critical illness is a good idea - and much cheaper when you're young (obviously the risk of becoming seriously ill increases with age, which is reflected in the premium). It provides a lump sum payment in the event of developing certain, pre-defined illnesses. Income protection is NOT the same as redundundancy cover - it provides regular income in the event of illness preventing you from working. This is obviously a good idea - but is usually expensive and will only replace a percentage of your income.

With the exception of buildings cover - which your mortgage lender will insist upon - everything else is optional. All are sensible options - but only you can decide how much is reasonable to commit to on a monthly basis. Most mortgage advisers are 'tied agents' - meaning they only advise on the products from one insurer. Some tied agents have higher product pricing than if you go direct (Countrywide Estate Agents were tied to Friends Life and charged about 70% more - which they received as commission - which is scandalous...)

I would find an Independent Financial Adviser and discuss your requirements. They will guide you properly. 

thomasross20

Right - thank you - so I can focus on buildings & contents and just hold off on the rest for now. Too much for me to check them all out. I'm going to give Direct Line a ring as my car insurance is with them and they've always been good. I don't need the best deal, just a good one as right now time is the most precious thing. 
Thanks!