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Income Protection Insurance Advice Wanted

Hi All

I am just changing jobs and obviously have some uncertainty as with anything new.

As I have a large amount of credit card debt (about £14k), I am considering taking some form of Income Protection insurance out.

Found a policy here (http://www.goodinsurance.co.uk) - though haven't yet read over the small print

What does eveyone think of these policies?  And can anyone recommend any good ones?  Are they worth the money or not?

I basically want cover for probably the first few months of my new job, until I am secure and settled.

I know most will probably have exclusions about being employed for a set length of time before payments can be made, but I am taking the policy out before I resign my current post and therefore it will simply be a change of jobs while the policy is in effect (a little naughty maybe).

Comments

  • Darryl
    Darryl Posts: 218 Forumite
    Hi Keith

    Martin has an article about Mortgage Payment Protection Insurance (MPPI) that you might what to read:
    http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1045441648,82807,

    Personally, I've found Income Protection insurance to be too expensive for what you (might) get. They usually have a few months deferral before they pay out, and you have to have been employed for at least 1-2 years. This makes them no good for when you have just started a new job (which is when you feel most vunerable - typical insurance for you!) Any policies that kick-in on day one will have a loading for the higher risk, and will probably be too expensive.

    So, MPPI might be good, if you want to protect your house.

    As for the debt, is this debt on the cheapest cards available (0% cards I mean)? If not, you might want to try switching the debt to one or two of these (again see Martin's tips for the best deals). If you can explain how your debt is structured now (i.e how much, where, amounts paid back per month, etc), we might be able to suggest better solutions.

    Darryl.
    ... Fool's Gold ...
  • most of these policies are actually underwritten by the same company so they are being repackaged and sold on, they are usually designed to pay out after your employer finishes paying sick pay, normally six months deferral, I think what your looking for is more of an accident and sickness policy which would pay out after a few weeks. if you are keen to protect yourself speak to a financial adviser about whayt policy is right for you.
    Income protection policies also have limits on the amount of cover you can have either half of your gross income or 66% less any state benefits that you would recieve. the cost of these policies varies with job,age sex, term,hours worked and amount of cover, some companies will not accept a lot of professions such as hgv driver or joiner. if you are just looking to cover your expenditure then set up a policy which just covers that amount it will be much cheaper.
  • dunstonh
    dunstonh Posts: 121,015 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Be careful not to mix up mortgage protection policies, often referred to as mortgage accident, sickness and unemployment plans (ASU) and permanent health insurance plans (income protection plans).

    They have different terms and conditions and benefit payment terms. Plus, one is underwritten to circumstances but the other is a general insurance.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • helen_jelly
    helen_jelly Posts: 2,982 Forumite
    New Joiners - please read the post by Spiggle - post number 1 - lots of great advice - Thank you

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