BigCGilmour Posted October 30, 2008 Share Posted October 30, 2008 No, not a thread about donating money to my favourite charity - me! I'm thinking about getting some "income protection" or "real life cover". Was wondering if any of you financial wizards could give me some advice. I always knock back PPI because as far as I'm concerned all insurance is a scam but PPI takes the p!Ss........... Due to certain events over the last few months and also the current financial situation (possible job losses etc) I think I require some form of protection should things go breasticles up!!! Any advice much appreciated Link to comment Share on other sites More sharing options...
Coco Posted October 30, 2008 Share Posted October 30, 2008 Because of adverse selection http://en.wikipedia.org/wiki/Adverse_selection the price of that kind of insurance is high relative to the expected value you would get back (risk of getting the sack times the payout you would get if you get the sack) - across the group of all people who could take out that sort of insurance. So - if you go and try to take it out, the company knows you are more of a risk than those who take don't go to take it out, so it is 'expensive'. But if you want to make sure that you can continue to cover payments on mortgage etc you might be willing to pay for that expensive insurance. Depends on your attitude to risk - are you willing to pay more than economically sensible (in the average case) now (a certain cost to you) in order to get the dosh should you lose your job (running the risk that if you don't lose your job you have handed over a big insurance premium). Link to comment Share on other sites More sharing options...
BigCGilmour Posted October 30, 2008 Author Share Posted October 30, 2008 But if I'm in good shape physically and...........erm mentally, only 32, don't smoke, keep myself fit, have no pre-existing medical issues and whose job is well as safe as anybodys does that mean that I should get a fairly decent premium? What is your take on insurance Coco? Link to comment Share on other sites More sharing options...
BigCGilmour Posted October 30, 2008 Author Share Posted October 30, 2008 Because of adverse selectionhttp://en.wikipedia.org/wiki/Adverse_selection the price of that kind of insurance is high relative to the expected value you would get back (risk of getting the sack times the payout you would get if you get the sack) - across the group of all people who could take out that sort of insurance. So - if you go and try to take it out, the company knows you are more of a risk than those who take don't go to take it out, so it is 'expensive'. But if you want to make sure that you can continue to cover payments on mortgage etc you might be willing to pay for that expensive insurance. Depends on your attitude to risk - are you willing to pay more than economically sensible (in the average case) now (a certain cost to you) in order to get the dosh should you lose your job (running the risk that if you don't lose your job you have handed over a big insurance premium). this is why I always decline PPI, I mean it doesn't kick in for x amount of time byt which time i'm always certain that I'll have found at least some form of income Link to comment Share on other sites More sharing options...
Coco Posted October 30, 2008 Share Posted October 30, 2008 But if I'm in good shape physically and...........erm mentally, only 32, don't smoke, keep myself fit, have no pre-existing medical issues and whose job is well as safe as anybodys does that mean that I should get a fairly decent premium? What is your take on insurance Coco? You should take proper advice on this sort of stuff would be my advice! But for income protection (ie health related cover) if you are the person you say in the above post yes I would have thought you would get a decent premium. I thought that you were worried about redundancy insurance or mortgage protection in your first post though. As for insurance - outside of the legally required stuff (car, buildings insurance if you have a mortgage); the average person loses out (the profit margin for the insurance company). But nobody is the average person so it all depends on your attitude to risk. Link to comment Share on other sites More sharing options...
BigCGilmour Posted October 30, 2008 Author Share Posted October 30, 2008 I don't know why I appear to be more worried now than before - been reading a few articles, people are apparently losing jobs and for some reason or other I've decided that it might be an idea to get some cover - hence the original post to get some peoples views. i certainly wouldn't go ahead without speaking to a few financial advisors ("salesmen")................ Being the opinionated forum this is though thought there would have been a few more responses!!!!!!! Link to comment Share on other sites More sharing options...
Coco Posted October 30, 2008 Share Posted October 30, 2008 I don't know why I appear to be more worried now than before - been reading a few articles, people are apparently losing jobs and for some reason or other I've decided that it might be an idea to get some cover - hence the original post to get some peoples views. i certainly wouldn't go ahead without speaking to a few financial advisors ("salesmen")................ Being the opinionated forum this is though thought there would have been a few more responses!!!!!!! If you are worried about the potential for losing your job - and it is likely that many people could see that situation in the next couple of years - then you would surely need to go for a PPI type insurance to 'benefit'? Assuming that you are not expecting a deterioration in your health? Trouble is that the insurance companies are well aware of the chance of people losing their jobs - and will have adjusted premia accordingly. Link to comment Share on other sites More sharing options...
Rab Posted October 30, 2008 Share Posted October 30, 2008 I don't know why I appear to be more worried now than before - been reading a few articles, people are apparently losing jobs and for some reason or other I've decided that it might be an idea to get some cover - hence the original post to get some peoples views. i certainly wouldn't go ahead without speaking to a few financial advisors ("salesmen")................ Being the opinionated forum this is though thought there would have been a few more responses!!!!!!! If your worry is losing your job through being made redundant as opposed to a health issue, then you don't need insurance. Just save up! Pick any figure you want, but a good rule of thumb is to have 3 months of living expenses in the bank at any one time. That way you can afford to live through the time it will take you to find another job. Link to comment Share on other sites More sharing options...
CAT Posted October 30, 2008 Share Posted October 30, 2008 If your worry is losing your job through being made redundant as opposed to a health issue, then you don't need insurance. Just save up! Pick any figure you want, but a good rule of thumb is to have 3 months of living expenses in the bank at any one time. That way you can afford to live through the time it will take you to find another job. It's always to good to have savings but it would take along time for me to save that kind of money. I recently got a quote from the post office for "Lifestyle protection" http://www.postoffice.co.uk/portal/po/jump1?catId=19300223&mediaId=26000661 Your premium is worked out from figures you enter yourself ie. How much you would need a month for Mortgage, Council Tax, bills etc. If you lost your job through sickness or redundancy they would pay you a monthly lump sum after 30 days of you being out of work. I think you have to work out how you would survive if you were out of work for a few months and weigh it up against the premium. Link to comment Share on other sites More sharing options...
Rab Posted October 30, 2008 Share Posted October 30, 2008 It's always to good to have savings but it would take along time for me to save that kind of money. I recently got a quote from the post office for "Lifestyle protection" http://www.postoffice.co.uk/portal/po/jump1?catId=19300223&mediaId=26000661 Your premium is worked out from figures you enter yourself ie. How much you would need a month for Mortgage, Council Tax, bills etc. If you lost your job through sickness or redundancy they would pay you a monthly lump sum after 30 days of you being out of work. I think you have to work out how you would survive if you were out of work for a few months and weigh it up against the premium. Exactly. I'm not saying insurance is always a bad idea, but the bottom line - as someone posted above - is that insurance companies make money from their policy holders; ie it costs you money. So if it'll take too long to put enough in the bank, there's no harm in buying insurance, but still save some money. That way you'll eventually have your nest egg if you need it, but it won't be costing you anything. In fact it could very easily be making you money. Link to comment Share on other sites More sharing options...
AVB1874 Posted October 30, 2008 Share Posted October 30, 2008 mate if your looking for life or income protection gives a pm and your number and il get it set up for you.. Work for a financial advisors and wil be able to get the best out there for you... Link to comment Share on other sites More sharing options...
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