Income Protection

Ducks

I am 28 with a salary of £15,000.

Recent bereavements have left me the parental home with no outstanding mortgage and about £120k cash/investments (split 50/50). I was living in the house anyway, so have no other property.

Current property is worth approx £130k.

I am looking at moving to a substantially more expensive property (around 200k mark), and planning to put 35k cash to new property and get mortgage for another 35k (roughly).

I'm only in my second job since leaving University but after being made redundant a few years ago, I am overly paranoid about taking on a fairly big financial commitment (by my standards anyway) and the same thing happening.

And now we come to the question part - sorry it took so long getting here!

All the income protection policies last for 12 months at around 60% of your gross wage (80% of your take home). Is there anything against taking out more than one income protection policy? Likewise, can I take out an income protection and a mortgage protection comprising of an income element, providing they're with different providers?

Also, does anyone have any alternative suggestions to my breakdown of the expenditure if I'm being a bit of a donkey about it?

And thanks for the great website. Excellent for someone like me with a great deal of interest but very little knowledge!

deemy2004

No, you can't take multiple policies

If you read the small print you will see that they would take OFF any payment from other like policies

DavidLaGuardia

I would personally look at income protection policies that cover for illness up until retirement or the end of the mortgage rather than the 12 month ones. If something serious happens thaen you can end up withan index linked income for as long as you need. [although you might also have acritical illness policy this is for a lump sum and only pays out on certain illnesses]
For someone of 28 years old they are not much more per month, it is also possible to get day on protection (if you have no sick pay). These are called Permanent Health Insurance policies (a bad name as nothing to do with medical insurance, tey are income protection policies)
Addtionally the 12 month cpntracts often have a pay out after 30 or 60 days. If you get sick pay for longer say 6 months, then the PHI contract may actually be cheaper even after you bold on a seperate one or two year unemployement insurance..

dunstonh

These are called Permanent Health Insurance policies (a bad name as nothing to do with medical insurance, tey are income protection policies)

I dont know. Permanent Health Insurance isnt really that similar to Private Medical Insurance.

I think the greater confusion is between Accident, Sickness and Unemployment plans which call themselves Income Protection and PHI.

Ducks

Right...

I suppose the main critical thing here is the duration. Income Protection is finite whereas Permanent Health Insurance, by definition, is permanent, but never covers unemployment.

So, what I'm after is the longest possible "Unemployment only" income protection policy. However, it only seems possible to acquire income protection for unemployment for longer than 12 months, if you take on the accident and sickness too.

Any ideas? i.e. Who am I best to get PHI from and does anyone know where I can get u/e only income protection for longer than 1 year?

Incidentally, I have type 1 diabetes, which will no doubt have a bearing on things.

Thanks all.

DavidLaGuardia

Rhino Insurance and Ntionwide (I think) go up to 24 months on unemployment only, there must be more though

deemy2004

The salaryprotect.co.uk is relatively low cost insurance against redundancy, 12 months is enough time to get back into employment.

payless

A few providers do offer 24m, although this usually comes at a price premium, as less competition in that market ( as opposed to 12m cover)