Income Cover and PPI

richardjones_2

Hi,

I currently have an Income Protection Policy and also 2 further PPI policies on my credit cards.

In the event of illness or unemployment will all three policies pay out or do the PPI policies not pay out if I have income protection?

I read somewhere that the PPI's will take money from the Income Protection Policy. Is this true?

What I want to know is that are these policies a waste of time and should I cancel these?

All responses greatly appreciated.

payless

often the case if considered "over insured" , then will be scaled down - but not always , depends on
1. products ( some have different clauses , that may either catch you, or even exclude this issue)
2. How its set up
3. amounts covered in relation to pre claim income levels

ArchieB_2

Agree with payless. If, when you claim you are asked if you have any other cover for the same risk then this will prove a problem. It should say in the policy document what the Insurer will do in the case of dual insurance though.

Generally I would never take out CC payment protection, particularly if you already have an IPI policy. CC PPI is massively expensive and pays out a pittance (min repayment amount). Cancel the CC PPI and make sure your IPI is adequate!

B

richardjones_2

Hi,

I have read the policy documents but cannot see anything with regards to dual insurance.

I am not quite sure what to do now. I have a policy with Halifax and Egg. It may be better off cancelling these.

What do you think?

payless

as both are sold "direct" and not knowing the trerms of you IPP product - it would be hard to comment

Perhaps ensuring you have enough long term sickness ( IP / PHI, which is usually illness only - although yout original post implies different ) , then considering if you want separate unemployment only cover ( if available) might be a potential starting point - although obviously this is not personal financial advice rather a discussion of possible routes.

richardjones_2

Yes, my IPP is short term as is I think the PPI. So nothing covered at this stage for long term illnesses.

But before I take out more insurance I want to know whether or not to cancel the others as it seems pointless having these extra policies if the insurers says I am over insured and they dont pay out in the event of a claim.

That would mean I would be just wasting money in premiums. Can insurers do this, or is this unlikely to happen?

payless

As stated , yes they can ... if its part of their conditions, and how the plan was set up, if you want to keep these covers , you really need to be asking the providers or original adviser

Rafter

An income protection policy bought from an insurance company will probably be much better value than a policy bought with a credit card or loan.

The office of fair trading thinks that card and loan companies make over 70% profit on those.

If you really want income protection, extend your policy or the other alternative is to self insure........

If the minimum payment on your cards is say £100/month your PPI insurance will usually pay this for upto 12 months so the benefit is £1200. Borrowing £1200 and putting it into a savings account would cost around £50 a year in interest (the difference between the savings and borrowing rate)

The insurance on the other hand will cost you 70p per £100 outstanding per month or £300+ in a year using the above example.

Check your cover though - it varies considerably and some policies pay a lot more than the minimum balance and will also pay the balance in full if you die or are permanently disabled.

Good luck.

R.