Caroline, 25 and John, 30, are about to have their first child. Caroline works as a PA and John works for a management consultancy firm in London. They have a combined salary of £45,000. They do not have insurance of any kind, but are aware they need to consider getting some form of protection now that they are about to start a family. They are on a tight budget and would like to weigh up all their options, but they don't know where to start. What recommendations can you make?
Andrew MacLellan, Millfield Partnership Prioritising their needs is key for John and Caroline, and I would propose income protection (IP) plans for both of them with a monthly benefit of £938, assuming equal salaries of £22,500. The cost would be £11.90 per month for John and £18.21 per month for Caroline. If they decided to take paternity or maternity leave, then their respective cover would reduce to £833 per month. Both premium and benefit are linked to increases in the Retail Price Index (RPI). The most cost effective plans are provided by BUPA. On the basis of the greater risk, bo...
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