Income Protection Insurance

markwilliams82

markwilliams82

markwilliams82

Associate
Joined
15 Sep 2009
Posts
1,495
Location
Birmingham
Evening all, I've just moved house and set up the new insurance and set up our life insurance (including critical illness cover)

The only policy I've not looked at yet to renew and is next on my list to update with the new address is the Income Protection Insurance that we currently have through aviva at a combined £45 per month for myself any my wife

Is this insurance worth continuing? Who on here has it and can you make any recommendations on alternative suppliers?

Thanks
 
Doubt anybody here would be willing to give advice, we don't know a thing about your personal circumstances and 99.9% of the posters are probably not qualified to offer advice.

Its worth seeing a proper financial advisor, a fee based one not a commission based one, and then make your own informed decision!
 
Honestly, you're wasting your time. I asked a lot of people in the real world about this and everyone said it was a waste of money.

Then I decided to post on here and everyone said it was worth it. Then another poster asked, and everyone said not to bother lol

IMHO

1. Is your job safe? or as safe as any job is these days
2. If you get made redundant, will the policy actually kick in (read the small print, then read it again, and again)
3. IF the policy kicks in, how long does it run for (some kick in after xx days, could you find a new job in that time)
4. Do you have any savings you could use if made redundant
5. Redundancy payout?
6. Could you cut back on your outgoings in an emergency (loans)

Too many variables
 
Yeah fully understand. When I spoke to my mortgage advisor initially when taking out; we took out on the basis of sickness or illness only and not redundancy as in all likeliness; if I lost my job I’d be down the job agencies the next day to sort temp work until permanent so we only have it on sickness cover
 
Other decent posts here so not much more to say. Comes down to working out whether you need it or not, and only you can really answer that (see posts above to help).What are the chances of you both being out of work at the same time, and could either salary cover the outgoings? something else to consider.
I've not bothered in the past, personally, but that's me, I've always saved to put money aside for rainy days rather than paying insurance hoping someone else pays me if my luck fails. I did have life assurance actually but as soon as I got debt to a level that didn't bother me, I even cancelled that.At one point it was mandatory too, required by my lender.
if you do, remember to revisit every so often. Ultimately try to get the mortgage paid down, then the risk lessens. Get it paid off and you don't need any of that stuff IMO.

Insurers of course like to put fear in people. Do the maths and apply risk based approach and then you can decide.
 
I have house insurance + mortgage with Nationwide. That's contents insurance and for structural damage (e.g. flood or fire), but I declined the redundancy insurance component.

When I got made redundant 3 years later, it was ok because there was an agreement between Nationwide and the Jobcentre where my mortgage became interest-only. When I found a job again, I paid my mortgage fully as before. There is also housing benefit which basically cancels out council tax. So no direct debits from the council while I was on jobseekers. Then when back in work, I was paying council tax again, although I did have to re-pay a couple of months in arrears. So it's not ideal, but it's a heads up that you do get some help when jobless.
 
My stance:

Income protection insurance is one of the most overlooked insurance products that nobody should be without. In my mind, especially if you earn a decent salary without which your world would fall apart income protection is simply a must. It is absolute stupidity to be without it. It is so cheap too. I don't understand why more people don't buy it! Think about it, if someone runs you over and paralyses you or if you lose an arm or whatever, I can sleep at night knowing that I'll continue to get an income for the rest of my life and we can continue current lifestyle, still make pensions contributions, invest, pay the mortgage(s) etc.

What do I have?

Legal and General Income Protection Benefit Plan
Monthly Benefit: £2,000
Deferred Period: 13 weeks (I get full sick pay for 3 months and keep a 6 month emergency fund of 6 months net income anyway)
Expiry age: 65

Premium details:
Monthly Premium: £23.29 (this premium may change after underwriting)
Premium Basis: Guaranteed*

Benefits Included in this Illustration:
• Income Protection Benefit ( Own Occupation
definition)
• Waiver of premiums during benefit payment
• Guaranteed Premiums assuming no change to
benefit level
• Hospitalisation benefit
• Guaranteed Insurability Option
• Continuous Cover
• Proportionate Benefit


Where did I buy it? Money World

£23.29...........what a bargain! People spend more on an iPhone contract but that iPhone isn't gonna bail them out when they have a life changing incapacity.
 
I used to advise and recommended plenty of income protection and PHI policies. I had a good few of those customers claim on them too.

Rather than go over what's already been said, I'll provide a brief snapshot statistic. We have 300 people in our office, ranging from age 18 to 60. 85 of those are covered by the company income protection policy and two of them have claimed (successfully) and both have been in receipt of payments for over 12 months now. Both are under 45 years old.

A very small sample size of the likelihood of a claim, for what I imagine is a pretty low risk occupation. I place a very high value on own my PHI policy.

LV used to be pretty good back in the day, and had a really good record of claims payments, but I'm out of touch now.
 
coolsurfer said:

£23.29...........what a bargain! People spend more on an iPhone contract but that iPhone isn't gonna bail them out when they have a life changing incapacity.
Click to expand...

That's extremely reasonable. My LV quote was for £40 which also included redundancy protection, bone fracture benefit and a few other bits on top, but the cheapest I got was through L&G for £30 a month.
 
Worst company I ever dealt with was legal & general (and I include openreach in that statement)

Just make sure your policies are correct!

fortunately after 12 months of complaining I was able to cancel my policy and have all my premiums refunded. Just make sure they have your details recorded correctly, and you are paying for what you think you're paying for.
 
I have it with Aviva, costs around £35/month I think. Kicks in after 2 months and pays around £2k I think.
 
Rids said:
Its worth seeing a proper financial advisor, a fee based one not a commission based one, and then make your own informed decision!
Click to expand...

They get a real bashing on here, though and sometimes the cost/benefit isn't there. I used an IFA to help me sort out all my financial affairs - plans and ideas came up that I'd never have even thought of so to me it was worth it. The important thing is it's tailored to your circumstances so often things you think you need are actually a waste of time.
 
coolsurfer said:
Snip
Click to expand...

That sounds more like a critical illness policy to me... does it cover your mortgage payments if you were made redundant/fired for example?

My view, if you're buying with someone else (wife/partner etc) then you should go for the life insurance policy as a minimum. We went for full mortgage coverage rather than a lump sum payment.

Next consideration is critical illness, only you know your circumstances, but consider if there's any benefits you get from work (i think i get 6 months full pay, followed by 6 months half pay, so could afford to still live comfortably for a year). If you're the sole/main income into the property, then you need to consider what would you do if you could no longer work? (does your wife/partner have qualifications and could pick up a similar salary to support the family?).

Then finally what i view as income protection, for things like if you suddenly got made redundant, how quickly/easily could you find yourself another job?

As with all things, the more you want to protect yourself the more it will cost you. Just need to weigh up those costs.
 
I had it years ago, bought house ... 3 months later was made redundant, they paid my mortgage
until I got back on my feet
 
TheOracle said:
1. Is your job safe? or as safe as any job is these days
2. If you get made redundant, will the policy actually kick in (read the small print, then read it again, and again)
3. IF the policy kicks in, how long does it run for (some kick in after xx days, could you find a new job in that time)
4. Do you have any savings you could use if made redundant
5. Redundancy payout?
6. Could you cut back on your outgoings in an emergency (loans)
Click to expand...

You're completely ignoring medical leave. I set mine to defer until after my employer's sick leave and my emergency fund would run low (i.e. 6 months). I assume you're thinking of short term unemployment insurance?
 
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