MPPI or PHI?

nevets2001uk

With our mortgage application now proceeding nicely I want to make sure I'm getting the right insurances. Contents is easy and I'm pretty happy with the L&G life assurance option but I'm still confused on MPPI and PHI cover.

My work pay me at least 4 weeks full pay with an discretional 8 weeks further after that. I'm considering the Best Insurance MPPI which goes back to day one as standard. For £16 a month I'd be covered up to £1000. Can this only cover my mortgage and immediate insurance premiums or can it be used for bills as well?

I'm aware that I might be better protected with a PHI as this will cover me for claims longer than 12 months. Are there any other advantages / disadvantages to a PHI over an MPPI?

What insurers are recommended for PHI products? ANT Insurance look reasonable but I'm not sure how good they would be to deal with and how there cover compares.

lisyloo

My work pay me at least 4 weeks full pay with an discretional 8 weeks further after that.

That wouldn't cover the situation of being off work for 30 years (although you may consider that an unlikely scenario).

Are there any other advantages / disadvantages to a PHI over an MPPI?

The H in PHI stands for Health, so it's for if you are unable to work due to health related issues i.e sickness or accident.
It doesn't cover you for redundancy.

You would have to look at what the MPPI covers you for, but I believe it's redundancy as well, so they are not comparable products.

So what cover is it exactly that you are looking for?

My own opinion is that it's seems logical to me to protect your income rather than get los of different product to protect various bills.
If you have your income covered then you should be able to pay fo everything you usually do.
Have mortgage, credit card, store card policies just seems to play into the hands of the insurance industry IMO.

As regards your situation I think you need to work out what it is you need to cover (most).
It's impossible to cover everything as you'd be penniless so you need to priorities.
So what do you want to cover and are you looking for short or long term?

With job prospects it's possible to be reasonably confident in your prospects, however none of us have total control over our health.
I'm not meaning to scaremonger, just pointing out that there is a difference.

Bear in mind also what your employer offers.
My employer offers free PHI. I'm lucky, but it's worth checking. Some pension policies include it.

dunstonh

The ideal scenario is to do MPPI and PHI. The PHI has a could have a 12 month deferment to kick in when the MPPI stops. However, you may need to split the PHI to have part on 12 months and part earlier depending on if and how much cover you need above the MPPI amount.

PHI is underwritten at point of sale and has far higher claims success rates than payment protection forms of income protection.

nevets2001uk

I guess my main concern is covering my mortgage and bills in the event I become ill for an extended period or if I am made redundant etc. I would prefer the claim to not be limited to 12 months in the event of a very extended illness so I'm guessing income protection is my better option.

Looking at ANT they cover your income with an ASU at a pretty reasonable rate. Wording looks OK to me although I'm not sure whether the lack of stress / backache cover is standard?

dunstonh

Looking at ANT they cover your income with an ASU at a pretty reasonable rate.

Ant took a bit of a beating recently on the forums when they upped their premiums a big chunk. Plus, I took a look at their policy document a while back and it has a few clauses in there which higher quality versions do not. As it typical with a lot of budget plans, they reduce cover or impose terms which allow them to shave a bit more off the premium. Very important when you consider that the typical DIY consumer buys by price and not quality.

nevets2001uk

Thanks. While my budget is important there's no point in me getting insurance unless it properly covers me so I shall keep looking. Can you recommend any decent Income Protection plans?

Chillers

dunstonh wrote: »

The ideal scenario is to do MPPI and PHI. The PHI has a 12 month deferment to kick in when the MPPI stops. However, you may need to split the PHI to have part on 12 months and part earlier depending on if and how much cover you need above the MPPI amount.

PHI is underwritten at point of sale and has far higher claims success rates than payment protection forms of income protection.

You may find a PHI company who will not limit your claim if you have mortgage protection as it is only payable for a limited time, and in most cases is not paid to you, but directly to your mortgage company.

I work for a PHI insurer (the market leader in fact) and I would never be without this kind of cover having seen the benefits for thousands of people. Before I started working at this company, I'd never even heard of PHI!

mattster

My employer pays me full pay for 6 months and half pay for a further 6 months if i am sick. Does anyone know of an insurer who will provide an income protection plan with a split deferment period which pays after 6 months and then increases the payment after a further 6 months or do i need to buy 2 separate policies?

dunstonh

mattster wrote: »

My employer pays me full pay for 6 months and half pay for a further 6 months if i am sick. Does anyone know of an insurer who will provide an income protection plan with a split deferment period which pays after 6 months and then increases the payment after a further 6 months or do i need to buy 2 separate policies?

All PHI policies allow a split. Only some budget payment protections plans allow a split.

Which are you after?