How to best protect family if I die/can't work?

[Noel]

I'm married with a 4 month old and want to ensure that whatever happens to me my wife can keep our home and have some money. Ditto if I'm unable to work through accident or illness. If I'm made redundant I shoudl get a pay off and will happily stack shelves to pay the mortgage.

I've got quotes for:

Level Term Life Assurance - £25.19 pcm to pay £500K (cover 20 yrs)
Mortgage Protection - £26.85 pcm to pay £1,500 pcm for 1 yr.

Should I consider other options?

Thanks

[scotal]

Who is the MPPI with? Be very careful about MPPI providers, some are very good at taking money and very poor at sending it back the other way should you need it.

Have you considered what will happen if you are disagnosed with a critical illness, e.g cancer, stroke that means you can't work?

[Noel]

The MPPI is to cover sickness & accident. So if I'm alive but unable to provide for the family (I will get sickness benefits from work to a point) some money will come in.

If I die they get a decent cash lump sum, and again they'll get an additional circa £150K from my employer.

I agree the devil is in the detail on all policies.

[fivesixseven8]

Another person here with an interest as I want to sort out similar policies for myself too.

[scotal]

Noel said:

If I die they get a decent cash lump sum, and again they'll get an additional circa £150K from my employer.

I was referring to Critical illness insurance. so if you are so ill you can't work, but don't die, the policy will pay out.

ETA. Is it a joint policy? What happens if your wife dies?

Edited by scotal on Tuesday 3rd November 12:38

[bogwoppit]

I would probably get a combined life + critical illness policy to cover the mortgage (decreasing cover). Your wife can probably get a part time job to pay the other bills. I don't really see the point in:
a) a critical illness policy that only pays out for a year
b) a life policy that pays many times what would be needed to maintain a lifestyle

[Mx_Stu]

It is worth sitting down with an adviser on this topic.

I had no cover in place until recently as my old employer paid a death in service benefit of 4x salary which I always thought would do the job.

When I left that job and discovered that my new employer didn't offer death in service I took out a policy to cover the mortgage plus a little bit if I die*. I thought that was it, job done, but how things change.

Cue baby on the way (well should be here by now). In all probability the OH wont go back to work for a couple of years. This led to the question well if I get hit by a bus* fine she'll get the mortgage paid and a few quid but what about the bills? Enter policy to pay out £20,000 per year for ten years if I die to give her the choices if the worst did happen.

Next up, What if I get hit by the bus and survive but end up paralysed*, who's gonna pay the mortgage? Or alternatively what if I get so stressed through work I have a heart attack. It would be useful if something paid out so I could have a couple of years off work, go back part time or work doing something completely different. Cue policy number 3 to pay out to cover the mortgage plus a little bit more on a critical illness.

Luckily I'm fairly young (27) so all these have low fixed monthly premiums.

ETA: When I get home i can post up the actual names of the policies, providers and premiums if it would be help?

• Never pleasant things to think about, but you only have to think about it once and then never again.

Edited by Mx_Stu on Tuesday 3rd November 15:58

[pjac67]

Hi Noel.
Speak to an IFA - there are plenty of us on here, google, Yell.com etc

I would definitely consider Mortgage Protection/Decreasing Term for Life/Critical illness cover topped up with Life/CI on a FIB (Family Income Benefit - very undersold/bought) and possibly a form of income replacement cover but as previously stated be wary of MPPI/ASU (ask yourself if it would payout and it can look very poor VFM).

HTH
Paul.

[Noel]

If my wife dies I'll flog the people carrier, get a 2 seater and the boy and I will spend every available weekend watching motorsport!!!!

I'll talk to an IFA and assess every option.

On the subject of getting a large payout in the event of my death, that's exactly what I want. I don't want my wife to have to worry about working for a very long time. And maybe a move to somewhere nice and a new car will put a smile on her face. For £25 pcm it seems like a very good assurance to have.

[bogwoppit]

Well you don't want to make it "too" comfortable for her if you die

[Tiggsy]

bogwoppit said:

I would probably get a combined life + critical illness policy to cover the mortgage (decreasing cover). Your wife can probably get a part time job to pay the other bills. I don't really see the point in:
a) a critical illness policy that only pays out for a year
b) a life policy that pays many times what would be needed to maintain a lifestyle

But if he is the main earner then the cost of maintaining a life style of any reasonable level is huge. £500k in the bank is nice but if his partner wants to stay at home and raise the kid it wont last forever.

When you are young the cost of the cover is very small yet the implication of not being covered is horrendous....if i am hit by a bus on the way home my wife would be very, very wealthy and have no need to ever work again. Meanwhile all the children would get an excellent education paid for them. The cost of that price of mind is less than i chuck on takeaways and meals out each month. Always staggers me when i meet young families who have nothing or, at best, a few times salary through work.....yet happily chuck Sky £30 a month!