Annie is 27 years old and single. She earns £25,000 a year in her job as a sales manager in a small shop in central London. Annie still lives at home, however, she is looking at renting her own flat within the next few months. She is considering paying £550 a month in rent. When she moves she wants to take out protection insurance to ensure she would not need to move back home should she become unable to work. Annie is a non-smoker. She is healthy apart from suffering a bout of depression in the past. What recommendations would you make?
Peter Chadborn, CBKIt is probable that Annie's employer does not provide employee benefits and so an income protection (IP) plan would meet her needs of protecting her income. As a young non-smoker the premium should not be prohibitive, however, I would resist the instinct to recommend the maximum cover available of around £1,145 a month as she is not yet used to taking responsibility for a household budget. Instead I would recommend a lower monthly benefit of £800 a month to cover her anticipated rent and basic household expenditure. Once Annie has settled into her own flat and her dispos...
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