PHI/MPPI/Income Protection Help

comp-uter_guy

Having been badgered into taking out a Mortgage Protection Paymentcare plan when I took out my mortgage last year, I have now realised that I could be saving money by changing the policy. I have now cancelled my current policy (that was taken through Abbey). I have been looking into alternative plans and reading lots of stuff on here but now I am really confused! So if anyone can help me make sense of it all then I'd really appreciate it.

My situation is this. I have a mortgage taken out in joint names with my wife. As she is not currently working, my salary is paying the full whack. Hence the reason why this is important. I would like cover in case I am unable to work through illness, and redundancy cover is also important (with the way the economy is at the moment no job can be classed as 100% safe). What I didn't know before is that my work do a PHI scheme (pays up to the age of 65 at a rate of full pay for 1-20 days, 75% for 21-65 days, 75% less LTIP for 66 days and over).

So what do you recommend for me? Aside from the mortgage there are also the household bills, etc that need to be considered.

Thanks in advance for any help.

Woby_Tide

sure more advice will be along shortly (including the normal "speak to an IFA") but just a quick point that should you not keep your current policy valid until you get a new policy in place. I know certain policies have a block on any claim in the first 2-3 months maybe, which is sometimes waived if you had a polciy with another insurer when you took out the new policy. As you say given the current market if you've just opened up a 3 month window of no cover might be worth seeing if you can delay that, teh extra cost will not be much if you then need to use it

comp-uter_guy

Thanks for your advice Woby_Tide - all useful to know. Does anyone else have anything further to add please? Cheers.

Julimk

Check out the 'limitation of benefits' section of your PHI (permanent health insurance aka income replacement).

You will almost certainly find that the benefits from any other policies such as MPPI/PPI would be deducted from any benefits the PHI will pay. So you may be better looking at a stand alone unemployement policy rather than duplicating the health cover.

TEDDYRUKSPIN

Hmmm. Very haste decision.

Correct, you should never cancel an assurance / insurance until the other is activated. Worse still..... you will now have to get another cover, go through the waiting periods and........ nothing is like for like.

Correct, go and see an IFA or shop around! Ha.

None of the above do the same thing! All different!

Different companies have different policy statements and definitions. None are really like for like.

MPPI/PPI is really short term sickness cover / unemployment cover
PHI is really long term sickness cover until a set expiry date only.

Not being sarcastic but you need to see an IFA / financial advisor!

No one should be providing advice. Providing advice is regulated and without providing the right documents out, the person providing advice is open for legal action.

I laugh and laugh. People really think financial advisors are the advisors in the 90's. Advisors now have to take exams and pass a yearly MOT in order to keep on providing advice. When I mean financial advisors I mean the people are actually regulated by the FSA and not a person who are introducers! Look at the business cards!

rachaelcousins

What is it you do? I ask due to your consideration that you might require Unemployment Cover. You must be careful, for example - self emplyed are unable to make themselves unemployed and so the policy will very rarely pay out.
It seems like your employer offers you a fantastic ill health benefit, which would make any ill health payment from a Mortgage Protection Policy void as you can only receive a certain level of cover.

It seems to me that you might of been mis advised as the agent/salesman should of asked you what cover/benefits were already in place. Have you pursued it?

I am an IFA, but not sure if I could help or advise you further. If I can I would be
glad to help.