Payment protection and life cover

[diesel]

As a single parent with my own LTD..i really should consider this.

I was interested in a getting some cover in the event of serious illness or disability to cover my basic bills, dont think i would be eligible for unemployment cover (correct me i am wrong).

Plus any recommendations on where to go for life cover and critical illness cover to pay me estate when i knock off.....

[Sockpuppet]

IMHO most of the "illness" covers for self employed people are not worth it. Only pay out after x weeks etc. Better off saving the premium money and having that as a seperate "rainy day fund".

[ASB]

As a single parent with my own LTD..i really should consider this.

I was interested in a getting some cover in the event of serious illness or disability to cover my basic bills, dont think i would be eligible for unemployment cover (correct me i am wrong).

Plus any recommendations on where to go for life cover and critical illness cover to pay me estate when i knock off.....

Irrespective of where you get you life cover try and ensure it is written into trust. This takes it out of your estate and therefore saves IHT on it (whether this will remain effective given the general attack of trusts is debatable but you should be able to get sensible advice from the life office issuing the policy).

[Gonzo]

IMHO most of the "illness" covers for self employed people are not worth it. Only pay out after x weeks etc. Better off saving the premium money and having that as a seperate "rainy day fund".

But they will pay out for as long as you need whereas your "rainy day fund" will eventually run out.

In my opinion, a rainy day fund is necessary anyway to cover a spell out of work for whatever reason. You can then opt for a policy with a long deferment period (i.e. doesn't pay out anything until after six months or even longer) since this will reduce the premiums considerably.

Usual disclaimer, I am not qualified and not authorised to charge for giving financial advice. The value of your investment and the income from it can go up as well as down.

[glashIFA@Paramount]

As a single parent with my own LTD..i really should consider this.

I was interested in a getting some cover in the event of serious illness or disability to cover my basic bills, dont think i would be eligible for unemployment cover (correct me i am wrong).

Plus any recommendations on where to go for life cover and critical illness cover to pay me estate when i knock off.....

Have a look at the Key Features document and it'll tell you what your covered for and in what event. I've done plenty and, unfortunately, had them pay out - no problems.

if you write a life policy with integrated Critical Illness in it (ie pays out on first event) then make sure its a carve out trust. That way, life cover to estate and Critical Illness payment to you in event of claim.

If you're worried about trusts and life cover then do it on Life of Another basis. Wife takes out the policy in her name with you as life assured. You die she gets the money as policyholder - never part of your estate.

[Fred Bloggs]

I found the best/most cost effective option was a "Family Income Benefit" life policy from Liverpool Victoria. I also found an income replacement policy from Friends Provident was the best/most cost effective option. It pays £1500 a month (tax free as it is insurance policy payment) after 6 months inability to work due to ill health. HTH.

[glashIFA@Paramount]

I found the best/most cost effective option was a "Family Income Benefit" life policy from Liverpool Victoria. I also found an income replacement policy from Friends Provident was the best/most cost effective option. It pays £1500 a month (tax free as it is insurance policy payment) after 6 months inability to work due to ill health. HTH.

If its regular income you want from a protection policy after a claim as opposed to a single lump sum then Family Income Benefit is fine, tends to be cheaper than lump sum as its a decreasing liability to the insurer.

Wouldn't disagree with Friends Provident - income protection is pretty much their core market and the policues are good. They're very familiar with the way IT Contractors operate and remunerate too.

[ASB]

If you're worried about trusts and life cover then do it on Life of Another basis. Wife takes out the policy in her name with you as life assured. You die she gets the money as policyholder - never part of your estate.

A possible issue with that is that it's going to be in the beneficiaries estate - probably not generally a problem. If it was into trust on death then this potentially provides more flexibility in that if the wife or similar did not need the money the trust could pay to the kids or whatever. Obviously in the way you describe the proscribed beneficiary could but then it would be a PET with possible risks in the event of death within 7 years.

However, given the current fashion for the government to scream foul about anything then insurance in trust is probably on the list as are deeds of variation.

As ever of course there is no generic answer.

[Lewis]

I found the best/most cost effective option was a "Family Income Benefit" life policy from Liverpool Victoria. I also found an income replacement policy from Friends Provident was the best/most cost effective option. It pays £1500 a month (tax free as it is insurance policy payment) after 6 months inability to work due to ill health. HTH.

How much do these cost very very roughly (say for a healthy 36 year old). I phoned Friends Provident but they insist on a full quote by a financial advisor that should take no longer than 15 minutes .... bit to much hassle at this stage.

[Fred Bloggs]

How much do these cost very very roughly (say for a healthy 36 year old). I phoned Friends Provident but they insist on a full quote by a financial advisor that should take no longer than 15 minutes .... bit to much hassle at this stage.

Sorry, I can't really help, I'm a lot older and I had a previous disorder that they had to consider. Sorry.