Income protection insurance - too cheap?

Locoblade

Hi All

Have recently been looking on Moneysupermarket.com for income protection insurance (ASU or just unemployment), and its struck me how much the prices vary for, on the face of it, similar cover.

The one that stands out the most is the policies from GetMy.com. Looking at unemployment only, they list 2 policies at around £8 a month that would cover £1200 a month in the event of a claim. One policy is for 6 months duration following a 30 day excess, the other is for a year after a 90 day excess.

The next cheapest policy is £17 a month, over double the price! This alternative is a slightly better specced policies at 12 months payout with only a month's excess, but Im not sure id need more than 6 months cover anyway, so I was wondering if there were any other obvious catches to watch out for with policies like this?

Its a similar story with the ASU insurance, getmy seem substantially cheaper than anyone else which obviously raises suspicions. Ive searched the site here and there's very little if any mention of this company, which also raises suspicion given their apparent competitive prices.

Any comments / recommendations / horror stories most welcome :beer:

thejoose

The ASU policies have a poor reputation. I take it you have read Martins page on their history and I suggest you tread carefully and read every line of the policy.

arkie

You get what you pay for !!!.
The comparison sites are just an indication of what you could pay and are very misleading, ( eg a mortgage deal is currently on the moneysupermarket website , yet that deal was withdrawn over 7 days ago) you never know if the policy is suitable for you. £8 per month for £1200's worth of cover is too good to be true.
Use a broker, dont do it yourself, you are trying to protect your income which provides you with your lifestyle, home etc let a professional arrange it for you. Why have ASU ? have income protection instead
Most whole of market brokers will offer it as a service give one a call in your local area and make sure they have more than one provider.

Locoblade

Cheers guys. I have read Martin's guide, it primarily seems to suggest its not a good idea to go with the overpriced tag-ons with the mortgage companies, and also look into whether you need ASU or just AS or just Unemployment, depending on your circumstances, but doesn't suggest they are bad per-se.

Out of interest, if all I want to do is pay our mortgage in the event of unemployment (we could cover other bills etc on the wife's salary), what is the advantage of income protection over mortgage protection?

If you'll allow me to go back to moneysupermarket for a moment, the cheapest income protection plans for £1200 cover unemployment seems to be around £30 a month with 30 day excess periods, max 12 months payout, whereas mortgage protection under the same or better terms (no excess period at all) can be achieved at £17 a month, or £8 a month if only for 6 months cover.

I accept there will be small print involved with any policy and there's no guarantee the quotes from the website are correct, but there does seem to be a general price discrepancy between the two types of insurance, but from a (admittedly quick so far) scan of the key facts etc, there doesn't seem to be any real difference/benefit between "income" and "mortgage" protection if you only need an amount sufficient to cover the mortgage?

dunstonh

I have read Martin's guide, it primarily seems to suggest its not a good idea to go with the overpriced tag-ons with the mortgage companies

Be wary of that though. Whilst bank provided ones are at the expensive end, they do generally offer better cover than the cheapest ones that Martin has promoted. Quality it not something that is reviewed in the article.

That said, you can still get cheaper than the banks but just dont get caught out by the cheap rubbish.

The article also has little or no coverage on PHI which is the best form of income protection.

Wutang_2

I cannot make my mind up which one I would avoid the most - ASU or MoneySuperMarket.com....it would have to be the latter as it is truly awful and misleading.

PHI via an IFA...don't you just love all the acronyms that some with the financial services (the FS)??

As for horror stories, not sure if this is the correct site for that.

Locoblade

Wutang wrote: »

I cannot make my mind up which one I would avoid the most - ASU or MoneySuperMarket.com....it would have to be the latter as it is truly awful and misleading.

Out of interest, why the downer on Moneysupermarket.com? I can see where problems may arise with it and I agree it can be misleading sometimes especially when comparing more complicated things such as mortgages (e.g. it will sort by rate but doesn't really take into account a large fee that low rate may demand), but I don't see it being worse than any other comparison site?

As for ASU, Im not necessarily looking for full ASU, just looking at my options to cover eventualities where I think I may need it, and on the face of it £8 a month for unemployment cover looks very good, hence the sceptical question to start this thread.