Case Study: Income Protection With a New Job and a New Baby

Meet Tim

With a new baby to care for, Tim and his wife Emma were delighted when Tim found a new job with a higher salary. However, the new company only offered two months of sick pay and no Income Protection as an employee benefit – leaving their family with gaps in their protection.

Tim got to work looking for an individual Income Protection policy that would cover their mortgage, other household bills, and the additional expenditure for childcare should he fall ill or suffer an accident.

Tim’s Income Protection

Feeling overwhelmed with the numerous different Income Protection options, Tim made a smart call… a call to Drewberry. He explained his situation to one of our friendly advisers, who took the time to understand Tim’s needs and find the most suitable product..

Setting the Deferred Period

Tim was initially looking for a policy with a deferred period of two months so that policy would start paying out once his sick pay ends, but with around one month of savings stored away, Tim’s adviser recommended setting a three month deferred period – saving Tim around 20% on his monthly premiums.

Medical History

Tim had a medical condition, which added a layer of complexity to the process. However, it was nothing our team hasn’t done many times before, and Tim’s adviser called the underwriters at the leading insurers to see what terms they would offer.

It turned out that the insurer that was initially the most competitively priced would need to increase the premiums on the policy by 50% to take account of the extra risk. However, Tim’s adviser managed to find another insurer that would be happy to offer standard premiums with no exclusions, which is a common situation.

The Result

After speaking to his adviser, Tim ended up with a slightly cheaper policy compared to what he was initially looking at online. By stretching out the deferred period and going with an insurer that was happy to cover his medical condition, he was able to get suitable cover at no extra cost.

Tim’s Life Insurance

Tim already had some existing Life Insurance that would pay out if he or his wife were to pass away, but the level of cover was only enough to pay off the mortgage. As they now had a child, TIm’s adviser suggested that they take out some additional cover.

Protecting Tim’s Family

As the mortgage was already covered with their existing policy, Tim’s adviser recommended a Family Income Benefit policy that would pay out enough each month to cover their other monthly bills should one of them pass away.

Family Income Benefit is usually better value for money compared to a term insurance policy that pays out a lump sum, and it also avoids the need to think about financial planning should one of them receive a big lump-sum all in one go.

With both Life Insurance policies in place, the remaining partner would be able to pay off the mortgage and would have enough money to pay their monthly bills until their child was 18 and had left school.

The Value of Independent Advice

Because Tim chose to purchase protection via our independent advisers, he was able to secure suitable, tailored coverage at the right price. The family is financially secure against the risk of Tim being unable to work due to accident or sickness, and the risk of either Tim or Emma passing away before their son had reached adulthood.

Tim and Emma’s situation is a common one, but if you’d like protection advice tailored to your circumstances please don’t hesitate to get in touch on 02084327333 or email help@drewberry.co.uk.

Tom Conner
Director at Drewberry

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