Income Protection price-hike after 3 months - is it allowed??

vgallagher

Hi

I wonder if someone could help me with some advice.

My husband and I always had our mortgage protection in my name but after an accident in 2005, I became disabled. My insurance did pay out for 12 months due to incapacity. However over time I had to accept that I was unable to return to work and as this meant I was unable to claim again, I looked into cancelling this cover. However as I am sure everyone will understand, especially given the economic climate and the fact that I am no longer able to earn, we were very worried about having no protection for either my husbands income or our mortgage.

I cancelled my policy and my husband took out income protection in his name (in April 2008) with Antisurance through Assurant Solutions at a premium of £18.75 per month. Then on 25 July 2008, he received a letter from them saying they were going to increase the premium to £27.43 per month from September 2008.

Could they do this?

I have trawled through the small print and the only bit I can find that may be relevant is "Duration of Cover - the policy is automatically renewed monthly". Is this where we were had????? I admit that when we read this at the start - it didn't ring any alarm bells. I (stupidly as it may appear) simply thought this meant we would need to give a months notice if cancelling the policy.

I may be jumping to conclusions here but if this clause covers their pretty-much immediate price-hike, then it seems to me that it was planned to bump up the price asap, hence the inclusion of the clause in the first place. In which case, are they mis-advising and mis-selling their policies?

I know £10 a month extra doesnt sound much but it is when you cant work. But if you think about it - it was 46.29% of an increase. Thats huge!!! Also does it mean that they could choose their increase their premiums even more, as and when they please?

We did a lot of research into income protection through this website and other resources and the recurrent theme was not to simply go with your own mortgage provider but shop around. This is what we did but the price we were quoted only stayed the same for a matter of months ...

Im sorry if this seems a ridiculous query given that it is now January 2009 but my husband did his ostrich thing and simply paid the increased premium without any querying - I have only just found out!

Any advices would be very very gratefully received.

dunstonh

Payment protection is, for most companies, written with reviewable premiums. That means they are allowed to change them.

Expect more providers to increase theirs in the next month or two as well as claims are taking a toll now.

vgallagher

okay ... not what I hoped to hear but thanks anyway.
Cheers