income protection fixed or variable premiums

hi123

hell
i am in process of arranging income protection cover for me and my wife
awaiting medical for my wife, was offered a norwich union policy via natwest for about 40% cheaper than friends provident one
only difference i have spotted in the 2 is the nu policy is reviewable at every 5 years
the difference in premium is 108£ for my wife for friends provident and 62 fro nu
what to do ,all advice welcome please

dunstonh

was offered a norwich union policy via natwest for about 40% cheaper than friends provident one

Go to an IFA and it will be cheaper still.

only difference i have spotted in the 2 is the nu policy is reviewable at every 5 years

Reviewable premiums are virtually always cheaper intially than guaranteed. However, guaranteed on PHI policies is common sense due to the long term nature.

You should also note that PHI policies can in multiple levels of cover so you could be comparing a budget or standard against a comprehensive or vice versa. Premium is a very poor way to compare products in this area.

hi123

thanks
i had seen an ifa,who never mentionned about variable premiums,only policy he recommended was friends provident's ,he told me that was the best policy in his opinion
i have had forms filled and sent ,am awaiting medical report re my wife
i bank with natwest and when visited branch recently,they had me sit with their personal manager,who gave me the quotes for norwich union which are about 40£ pm cheaper,fixed for 5 yrs so i save about 2000£ during this time and she told me that premium will not be loaded for medical conditions etc we develop during these 5 yrs ,is that correct,if yes why and how they review the premium after 5 yrs

dunstonh

i had seen an ifa,who never mentionned about variable premiums,only policy he recommended was friends provident's ,he told me that was the best policy in his opinion

IFAs will typically recommend the best option within your budget. If you can afford guaranteed they will nearly always go with that. If you start umming and erring about cost then they will look at using some of the budget options, like reviewable premiums or lower cover versions.

i bank with natwest and when visited branch recently,they had me sit with their personal manager,who gave me the quotes for norwich union which are about 40£ pm cheaper,fixed for 5 yrs so i save about 2000£ during this time and she told me that premium will not be loaded for medical conditions etc we develop during these 5 yrs ,is that correct,if yes why and how they review the premium after 5 yrs

It may be an NU plan but its an NU plan but with at higher Natwest charges. Any IFA can beat that even using NU.

The reviewable part is if the company suffer a large increase in claims for some reason they can up the price. (you may have noticed the ant insurance posts on here where premiums have nearly doubled for some people on reviewable plans in the last month).

hi123

thanks again
income protection plan for me and my wife is costing us around 170£ pm,so not cheap hence was looking at alternative
ifa is also trying to sell me stocks isa and stakeholders pension plan,have to read about them as well
any particular post which are helpful

dunstonh

ifa is also trying to sell me stocks isa and stakeholders pension plan,have to read about them as well

I thought you said it was a natwest sales rep. Not an IFA. Even if you have got a whole of market adviser from Natwest, its still not a good place to buy due to sales targets and sales pressures and there is very little chance of discounting from a bank. Hence why you are being sold to and not being advised on what is best.

payless

Think the OP said an IFA recoimmended the FP policy and then Natwest offered alternative cheaper plans ( reviewable) .. I think any good IFA should have also mentioned reviewable plans if they were much cheaper - even if they were recemmending the guaranteed policy.
Remember that some IFAs also have sales targets and sales pressures , as they work for "ifa salesforces" .. some of which target particular professions aggressively-some of which I seen often leading with Income protection then other products - make sure that if you are looking at ISAs and pensions that the availability of certain commission structures to the IFA is not dominating their provider choice, as I belive can be the case with some of these IFA salesforces ( or so I've thought when asked to review some recommendations)

dunstonh

as they work for "ifa salesforces"

I think you mean if. If so, I agree. All salesforces, regardless of status should be avoided.

payless

We're getting mixed up with grammar ( I did say - "SOME IFAs , hence not sure if need that IF)- but I think we both agree ... IFA salesforces come in various guises - some are bank employed , some claim to specialise in certain professions

hi123

thanks all
do not know whom to trust really after such diverse advice
natwest sales person was clear she has not sold a fixed premium policy in years,the ifa from the company who visited the work place was equally sure no one buys reviewable premiums
i am so hesitant to with either for pensions and equity isa now