ASU and life, critical illness quote given

jackswan

Just had a quote from an IFA regarding income protection and life insurance with critical illness on mortgage payments. Just seem a bit on the high side to me.
Myself male non smoker 39
wife non smoker 36
Monthly mortgage payments of £300 with time remaining of 10 years.

given a quote of £56 a month (life insurance with Scot Prov) with income protection on each of us deferred for 6 months, covers unemployment and will pay out £300 a month on either of us. The £56 also has insurance to cover the premiums.

Presently with the Nationwide which charges £32.32 for both for the income protection (with a deferred period of 30 days) and just got a quote from Scot Prov for joint cover with critical illness on a decreasing sum of £28000 for 10 years of £13.51 monthly
Assuming that I would get income protection slightly cheaper than the Nationwide, so the above quote from the IFA seems very high.

Any advice

dunstonh

Are you sure it was an IFA doing it under advice basis?

an IFA firm doesnt necessarily mean that you are seeing an IFA.  Particulary when it comes to mortgage related business.    

Scot prov rarely come out as best provider on pricing but they are often used on  protection only basis process because of the commission rate they pay.  Or because its a quick application as they combine the application for both whereas not all providers do.  

You should ask the IFA/advisor for the price comparison list.   All the major price portals list, in price order, at least a dozen or so companies.   Then ask them why they have chosen scot prov (who are probably 8th or thereabouts) and not the companies higher up.   If you dont get a satisfactory response, then take your business elsewhere.

I suspect that you have not been advised under IFA advice rules but under the protection only sales process. (even if it was an IFA doing it as IFAs can use either process)

The price can certainly be beaten, assuming normal health terms.

jackswan

I won a case for a mis-sold endowment and as part of the compensation offered by the endowment company, I was allowed to receive advice from an IFA.
I contacted the above IFA (who told me that he was independent and gave me a card with MLIA(dips), FPC after his name). The advice he gave my wife and myself cost the endowment company £250 for 1 3/4 hours.

By seeing an IFA I just wanted someone to reassure us that we were doing the right thing by selling our endowment policy and converting to a repayment mortgage.
He also suggested that he could get life insurance (for the repayment mortgage) and ASU (which I already have but for a slightly less amount).
We were shown a comparison of different companies, some cheaper, but we were told that Scot Prov were the best.
Returned a couple of days later to look at what he had come up with and were given the figures as in the previous post.Did ask about the commission but he did not really explain it.
Our first appointment with him seemed to go alright, but I myself did not think that the advice was worth £250. Our second visit was purely on a commission basis, but thinking about what was offered afterwards we will not go with it. It will be cheaper to take the policies out with our mortgage lender, the Nationwide

Just had a quick look at some sites on the web and have already reduced the total price
£13.51 joint cover for life insurance and critical illness on the mortgage with Scot Prov.
£13.77 each for ASU with 30 days deferred payment.
Gives a total of £41.05 per month.

Now thinking that we are being given bad advicef by an IFA

MarkyMarkD

I'd be amazed if you can get life cover or ASU as cheaply from any lender as you can from an IFA, unless the IFA is completely mis-selling to you.

Are you sure that you are comparing like with like when you suggest that Nationwide will be cheaper?

dunstonh

I'd be amazed if you can get life cover or ASU as cheaply from any lender as you can from an IFA, unless the IFA is completely mis-selling to you.

Are you sure that you are comparing like with like when you suggest that Nationwide will be cheaper?

My thoughts exactly too. The banks/building societies will not be offering best price.

MLIA(dip) means nothing. You pay an annual subscription to be a member to them and you get to use those initials. FPC is similar.

As i said, I dont think you are being "advised" by an IFA advice process. It sounds like the protection only sales process which doesnt require best premium to be sold.

jackswan

Spoke to the IFA this morning and he is acting under IFA advice rules and looking for the best deal for us available.
Mentioned that there are other products around such as from Payprotect but don't give the same sort of protection and will not include a premium payment benefit.
He also mentioned that it is a PPI and everything is through Scot Prov as they also give a £7 discount. There is a Level Annual Disability built in which gives after a deferred period of 26 weeks an income benefit for the rest of the policy term(10 years) due to sickness accident or disability. I mentioned the Nationwide cover in an earlier post but this only covers for 12 months from its payout date
He has chosen this type of policy , he says, as it covers every angle possible, but there are cheaper options available but not giving the same sort of cover.
Asked about the commission that he will receive and he says that he does not have to disclose it, as this type of policy is not regulated, but there is no problem if we want to see it.
After going through the endowment mis-selling and our total distrust towards anyone dealing with finance after that, we just want to make the correct decision.

dunstonh

I'm not sure here but i believe commission does have to be disclosed on IFA advice process but not on protection only basis.

Did you see the comparisons that he obtained?

I'm not hot on accident sickness plans as i rarely deal in that area.  However, life protection/critical illness i do a fair chunk of and L&G, Friends Prov, NU, Scot Widows, Standard Life are just a few that usually appear cheaper than Scot Prov on the portal quote lists.

I dont want to say what your IFA is doing is right or wrong as we dont have the full information.

The combination discount may be better than the difference in premium between the cheaper standalone options.  Only way to confirm that is look at two standalone quotes.  Once for Life and CI and one for Accident sickness and unemployment.

Also, the benefit options seem quite good on the plan the IFA has offered so yes, there would be cheaper options but with lesser cover.

If you post your ages, sum assured/required amounts and term we can take those and see what standalone policies come out at.  That is probably the best way for you to proceed so you know one way or another which is best.

jackswan

Thanks for the reply.

Here are some figures
Male 39 non smoker
Female 36 non smoker

Sum assured £28000
sum required £300pm
term 10 years

The only comparisons that he obtained were for

Death or earlier critical illness
Disabilty income benefit
on each life which came to approx £29

and then the one at £56 which included
the above plus
unemployment benefit(on each life)
Premium payment benefit(sickness, accident or disability)
Premium payment benefit(unemployment)

Both by Scot Prov.

As for the commission charges I thought that they had to be disclosed on any products being sold.

Did see a few other products on the screen, but he felt that Scot Prov were the best all round

payless

sounds like he is including an income protection (phi) type plan all in one.

Terms and premiums of each sector needs to be considered, plus then look at discounts for doing all in one, compared with single products

Apart from my own case ( SP commission structure is competitive , and this outweighs the higher premium for me on my own case) I can only remember 2/3 cases that I found them the best in the last 3 yrs

(DD - perhaps this highlights thats it not all
IFA good/ protection adviser bad - especially with regulation from 14/1/05 for protection , and multi tie option for IFA's )

jackswan

Ok, here's the fiqures quoted on the phone this morning

Accident, sickness
male £9.51
female £7.51

unemployment
male £11.21
female £9.54

critical illness
joint £17.80

premium payment benefit
sickness, accident or disability £3.16
unemployment £5.07

total of £63.80 minus discount of £7.28 giving a monthly total of £56.52

he also mentioned that it was PPI

dunstonh

(DD - perhaps this highlights thats it not all
IFA good/ protection adviser bad - especially with regulation from 14/1/05 for protection , and multi tie option for IFA's )

Its not the people (although there is always exceptions). Its the process I dont like.

My opinion is where there is a cheaper premium, it should always be mentioned along with valid reasons for not using it. Whether its protection basis or IFA basis.