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Income/mortgage protection benefit

Discussion in 'Health and wellbeing' started by goosey200, Dec 14, 2019.

  1. goosey200

    goosey200 New commenter

    First time, single buyer here and totally confused!
    I’ve been advised by the mortgage broker I’m using that I should get income protection benefit and/or mortgage decreasing life insurance once I buy the house. It sounds very useful, especially as the sick pay benefits at school (primary state/academy) last barely 12 weeks.
    However, the quotes I’ve seen are ridiculously high!
    Is it really worth it? Am I likely to get better quotes through the union (apparently ‘teacher’ is a high risk category due to risks of mental illness...) Of course, I feel fine now and am in perfect health...but I guess that’s the whole point of this insurance-so you’re not caught out.
    Everyone I speak to at work, who says they don’t bother are those who have a spouse’s income to rely on.
    Many thanks in advance
  2. cornflake

    cornflake Senior commenter

    Life insurance will benefit a partner/spouse/child - rather than you. I pay into the teachers pension (at the mo) which has a fairly advantageous death-in-service element... so that is worth remembering too!
    Generally the younger you are the cheaper it is; and if you are fit and healthy there is an argument for getting it now as it will be without exclusions etc. The same could be true for income protection.
    HOWEVER, you can take these out at any time - they don't have to be done with your mortgage (I suspect your broker gets commission if you do though, which is why they will be keen!).

    I am single.
    I don't have income protection - way too expensive! I have some life insurance which is not very costly per month (would pay out on terminal diagnosis), and some which is more costly (and has quite a lot of policy exclusions because of health issues). I took the second policy out when I thought I might have kids. I am just about to cancel it as one way of reducing my outgoings.
  3. davidmu

    davidmu Occasional commenter

    You are in a similar position to me many years ago. I bought as a single person but purchased mortgage protection through an endowment that paid off the mortgage in the event of my death. I was 28 at the time and the mortgage was for 25 years. There is no guarantee but on maturity it paid out 4 times the mortgage debt. I do not know if similar arrangements are still possible but it is worth an investigation.
  4. Abitofeverything

    Abitofeverything Occasional commenter

    Personally I wouldn't bother until you have dependents to worry about. The inservice benefits to teachers in terms of critical illness are pretty good. I got mortgage protection/life ins when I had my kids and had other people to worry about. I would also advise you that when you are ready to get it, consult a proper financial advisor. They take a cut from the company, not from you, so it doesn't cost you any more - I found the whole thing so confusing as there are so many different products available that having independent, professional advice really helped. Good luck!
    576 likes this.
  5. 576

    576 Established commenter

    What's your plan if the worst happens?
    I refused these when I got my mortgage.
    It was agreed that if I was so sick that the 6 months sickpay I was entitled to ran out and I couldn't afford the mortgage then my parents would take me back in.
    I have no life insurance as I have no dependents. Everyone in the family has their own house so 2020 I plan to make my will and leave everything to a charity.

    The question to ask is if you are off work till the sick pay runs out, what's your plan?

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