20 year old teacher - Is "Income Protection" her overriding financial priority?

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mula

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In a discussion about pension avc's for a 20 year old teacher mula suggested that " income protection should be her first priorty". Ive moved the discussion here. What do people in the Insurance forum think of the assertion?...........aj

munster man said:
My daughter started work as a temporary primary teacher Sept.05.

A consultant from Cornmarket is in the process of signing her up for an AVC policy, but I have advised her to wait a few years before taking out this policy as she is very young (still only twenty). If she continues teaching she will have her full 40 years service at age sixty.

I need advice on this matter as she seems to have her mind set on signing up with Cornmarket. She is on a salary of €34,250 and was told she would enhance her lump sum by signing up now and would also receive tax relief at 42%.

I would appreciate any help on this matter.

Thanks Munsterman.
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hi munster man

imho your daughter is far to young to be taking out an avc. income protection should be her first priorty and the rep should have had this at the top of their recommmendations. protecting your daughters lively hood is far more important then avcs atm

in relation to retirement
your daughter has the option to retire from 55 onwards on a reduced pension the details of which are available at www.cspensions.gov.ie

i suggest you have a good read of this especially the FAQ section. they also have a pension modeller system which allows you to see the effects of early retirement on your daughters superannuation benefits.

with the increase in the amount you are allowed to put away for retirement (up to 40% depending on age) your daughter should be in no rush to fund for her retirement at this stage
 
Re: AVC Cornmarket Suitable for a 20yo teacher?

Hi Mula,

I suggest the following might rate higher in terms of personal finance for a young professional person.

  • max out your contributions to your SSIA.
  • start saving for a deposit for a house.
  • pay down any debt accumulated during your student days.
  • consider health insurance.
  • consider further professional training and development.
I cant accept your assertion that income protection is the overriding priority in terms of personal finance for a young professional.

aj
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Re: AVC Cornmarket Suitable for a 20yo teacher?

ajapale said:
Hi Mula,

I suggest the following might rate higher in terms of personal finance for a young professional person.
  • max out your contributions to your SSIA.
  • start saving for a deposit for a house.
  • pay down any debt accumulated during your student days.
  • consider health insurance.
  • consider further professional training and development.
I cant accept your assertion that income protection is the overriding priority in terms of personal finance for a young professional.

aj
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hi aj

well imho the first priority is to protect the one thing that pays for all the above which is your income. long term disability = no income which = no munzos to pay for

SSIA
house or mortgage if you alreay have a house
student debt
health insurance
furhter traiining etc etc


mula
 
Have we got to the stage where a 20 year old's first priority is her pension ?

I'm an atheist, but God help us!
 
jpd said:
Have we got to the stage where a 20 year old's first priority is her pension ?

I'm an atheist, but God help us!
Click to expand...

My thoughts too! Too much of the world to see and her fund will be worth SFA if she gets run over by a bus!
 
jpd and jdwex,

The question posed in this thread concerns "Income Protection" and the financial priorities of a 20yo teacher.

"Income Protection" is a financial product aslo known as income continuance or PHI Permanent Health Insurance.

The question of pension avc's for young teachers is discussed in pensions.

aj
 
Would have to agree with Mula here, less say the bus didn't quite 'run her over' as jdwex suggested, but rather just knocked her down and as a result of her injuries she couldn't work for a couple of years. Without income protection she wouldn't be able to continue her SSIA contributions, which she was using to save for a deposit for her house. In fact whatever was left in the SSIA fund was used to pay off her student loans, leaving her with no income and no savings. With no savings she couldn't afford to complete the distance learning course while bored out of her mind on sick leave.

So I guess that just leaves the health insurance. So that beckons another debate - which is more important health insurance or income protection?
http://www.askaboutmoney.com/showthread.php?t=38448
 
sunshine? said:
Would have to agree with Mula here, less say the bus didn't quite 'run her over' as jdwex suggested, but rather just knocked her down and as a result of her injuries she couldn't work for a couple of years. Without income protection she wouldn't be able to continue her SSIA contributions, which she was using to save for a deposit for her house. In fact whatever was left in the SSIA fund was used to pay off her student loans, leaving her with no income and no savings. With no savings she couldn't afford to complete the distance learning course while bored out of her mind on sick leave.

So I guess that just leaves the health insurance. So that beckons another debate - which is more important health insurance or income protection?
http://www.askaboutmoney.com/showthread.php?t=38448
Click to expand...


income protection if you can get it
 
By my quick calculation,
  • take a salary of €35k per annum
  • use an inflation rate of 3% p.a.
  • over 40 years this amounts to over €2.6m if my calcs are correct.
Q1 - Is this worth insuring?
Q2 - When should you begin to insure it - now?... or take a chance that you stay healthy and only start paying at, say, age 30?

I know what I'd do. I agree with Mula
 
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