Life Insurance for a contractor

[TheCyclingProgrammer]

Would you pay for life-insurance if you didn't have a mortgage? I'm guessing not, and that's my point.

Yes I would, as my wife currently isn't earning. I have a separate level term policy in my name that is completely separate to our decreasing term policy. It would provide a liveable income to my wife and children until the children have grown up.

Living debt-free is great, and the mortgage is the only debt we have.

[vwdan]

I think we're on the same wavelength, just slightly apart.

Would you pay for life-insurance if you didn't have a mortgage? I'm guessing not, and that's my point.

Quickly get to the point of being debt-free then you don't need to waste needless cash on things that only serve to line the pockets of others.

Do you not have dependants I take it? If not, why have the insurance at all?

Paying the mortgage is just one part of what my insurance is designed for.

[ContractorBanking]

I'm with you. I'm not a believer in insuring for everything but a life policy on a decreasing term against a mortgage seems like a no-brainer for me.

If something happens to me or my wife, our mortgage would be paid off in full. The whole point of an insurance policy like this is that you hope it never gets cashed in, but I'm happier knowing its there rather than making £240/year in overpayments!

I think we're on the same wavelength, just slightly apart.

Would you pay for life-insurance if you didn't have a mortgage? I'm guessing not, and that's my point.

Quickly get to the point of being debt-free then you don't need to waste needless cash on things that only serve to line the pockets of others.

[TheCyclingProgrammer]

Sorry, really can't get in on the thinking here. Insurance is a risk based form of bet (With the big key difference that, in theory, both parties are invested in the same outcome - you being alive) - there's no scam, just the hope that it's not required.

You can sign up for life insurance today, pay a few months worth and potentially wind up with hundreds of thousands for your family. Without insurance, there's no other financially prudent way to do that.

Just some random numbers, I think I've got about 516 instalments of life insurance before it expires. The total adds up to about 4% of the potential payout.

What are you basing this on?

I'm with you. I'm not a believer in insuring for everything but a life policy on a decreasing term against a mortgage seems like a no-brainer for me.

If something happens to me or my wife, our mortgage would be paid off in full. The whole point of an insurance policy like this is that you hope it never gets cashed in, but I'm happier knowing its there rather than making £240/year in overpayments!

[vwdan]

Personally, I avoid insurances at all costs, except for a few. Just a waste of money.

Only thing I have insured is house, car and boiler cover, everything else if anything happens, I'll pay for it out of my pocket.

Sorry, really can't get in on the thinking here. Insurance is a risk based form of bet (With the big key difference that, in theory, both parties are invested in the same outcome - you being alive) - there's no scam, just the hope that it's not required.

You can sign up for life insurance today, pay a few months worth and potentially wind up with hundreds of thousands for your family. Without insurance, there's no other financially prudent way to do that.

Just some random numbers, I think I've got about 516 instalments of life insurance before it expires. The total adds up to about 4% of the potential payout.

Take the insurances you've listed. If you pay that amount against the mortgage capital instead, you're far better off

What are you basing this on?

[ContractorBanking]

I know most of us on here don't have lives to insure, but for the few of us that do what has anyone got?

Going through a mortgage application, I have an existing life insurance policy for the old property at roughly twice the mortgage but this was obtained in my permie days so isn't really suitable for things as they sit now.

• Mortgage Protection - No brainer, needs to be covered incase the wife kills me in my sleep.
• Critical Illness Cover
• Income Protection

Now when the IFA spoke to me about the difference between CIC and IP to me it seemed redundant having them both, the main difference being CIC will give me a lump sum, where as IP will give me a monthly income but for a wider ranger of situations.

I've asked for a quote for both so will see what they come back with, anyone got any experience of this?

Personally, I avoid insurances at all costs, except for a few. Just a waste of money.

Only thing I have insured is house, car and boiler cover, everything else if anything happens, I'll pay for it out of my pocket.

Take the insurances you've listed. If you pay that amount against the mortgage capital instead, you're far better off. Then you'll calculate the true cost of those insurances.

I'm different in that respect. I only buy the house, car, etc that I can afford to pay in cash and don't worry about the 'debt-premium', ie most people say mortage costs me x, but don't factor into account the mandatory insurances, don't include the PCP car deal, etc

Anyway, that's my tuppence worth.

[ladymuck]

Do you like cats?

I did used to have a cat. I wouldn't get another.

[TheCyclingProgrammer]

I have two policies through L&G.

A joint policy with my wife - decreasing term of the lifetime of our mortgage - which was to cover the mortgage itself.

A single policy in my name only. £400k level term over 21 years or so, intended to provide income to my family while the children are still children should something happen to me as I am the only earner.

As a result if something happened my wife would be left with no mortgage and 15 years or so of modest income until the children are adults.

The policies both cost about £20/month. I have no critical illness cover but maintain as high a war chest as possible.

[ladymuck]

I just have IP that will pay out about £3.5k a month if I'm ill long term.

The benefits of having no dependents and being willing to die lonely and bitter

[vwdan]

I'm covered for about £500k - had to go through a specialist broker for flying, and being young-ish it came out reasonable enough that it's currently set to rise with inflation. When the monthly costs get too much I'll stop that and an in real terms the cover will start to decrease. Our mortgage is relatively small now so that should leave them plenty to be getting on with.

To be frank, with hobbies like aviation and motorbikes I wanted to be absolutely content that if I **** it up the remaining family have absolutely nothing to worry about financially. Given how young the little one is, there's potentially a long period there.

Currently investigating CIC, but I had a chat and I was worried about some of the conditions and payout maximums. I need to do more digging on that and see how to make it work.

As someone else said, I couldn't get anything sensible out of Income Protection.

[BlueSharp]

I know most of us on here don't have lives to insure, but for the few of us that do what has anyone got?

Going through a mortgage application, I have an existing life insurance policy for the old property at roughly twice the mortgage but this was obtained in my permie days so isn't really suitable for things as they sit now.

• Mortgage Protection - No brainer, needs to be covered incase the wife kills me in my sleep.
• Critical Illness Cover
• Income Protection

Now when the IFA spoke to me about the difference between CIC and IP to me it seemed redundant having them both, the main difference being CIC will give me a lump sum, where as IP will give me a monthly income but for a wider ranger of situations.

I've asked for a quote for both so will see what they come back with, anyone got any experience of this?

I looked in to Income Protection, but as an IT worker who sits in front a of a desk all day the criteria for it to ever pay was incredibly high, there is also a condition where unable to commute (i.e. Drive) was expressly excluded as well. In the end I settled with Life Insurance enough for mortgage, school fees and all bills until kids are 21, private medical to get me on my feet as quickly as possible and a 6 month war chest.

[northernladuk]

I'll ask my Gladiator but he's a bit busy bleeding my radiators at the moment.

[SimonMac]

I know most of us on here don't have lives to insure, but for the few of us that do what has anyone got?

Going through a mortgage application, I have an existing life insurance policy for the old property at roughly twice the mortgage but this was obtained in my permie days so isn't really suitable for things as they sit now.

• Mortgage Protection - No brainer, needs to be covered incase the wife kills me in my sleep.
• Critical Illness Cover
• Income Protection

Now when the IFA spoke to me about the difference between CIC and IP to me it seemed redundant having them both, the main difference being CIC will give me a lump sum, where as IP will give me a monthly income but for a wider ranger of situations.

I've asked for a quote for both so will see what they come back with, anyone got any experience of this?