MPPI with Paymentshield - Premiums increase

OshayAway

homeadvice wrote: »

Hi Guys ...well took the plunge with Legal & General income payment protection. Decided not to go with MPPI due to reason sited in this thread. Got a quote through insureme-online.co.uk via www.mortgage-paymentprotection.com and got the first 3 months free & monthly payments of £52 a month. happy as a pig in you know what. Just wanted to say thanks for all the helpfull posts on this thread and special thanks to dunstonh for taking the time out to post.
Regards,
J.

What reason? looks like the site you refer to doesn't even offer PHI.

homeadvice_2

OshayAway wrote: »

What reason? looks like the site you refer to doesn't even offer PHI.

Hi ...got to admit you got me with PHI, was not even sure what that was! Had a google and think I have got it now. I'm assuming your refering to Perminant Health Insurance? If that is the case then I think you have your wires crossed. From what I've read, its understandable since the two products have names that are way too simular what you refer to is income protection insurance (IPI) which is a form of critical illness cover. What I have bought is income payment protection (IPP) which is a form of PPI. The major difference between the two being that IPP covers redundancy (at a small extra cost to me :cool:) which is something that no PHI covers. From how I understand it, PPI is the only form of cover that supports this eventuality, in the UK at least. So if your worried about the recession then income payment protection or mortgage payment protection are your only real options. If I have got this wrong then please point out the error of my ways.
Cheers,
J.

dunstonh

PHI is proper income protection in its conventional sense. Its far superior to PPI/MPPI on accident and sickness. MPPI or PPI are closer to matches to budget versions of PHI with unemployment cover bolted on. A PHI with standalone unemployment cover is usually the best option. Especially where there are sickness benefits paid by the employer.

Critical illness should not be considered as a form of income protection.

homeadvice_2

Critical illness should not be considered as a form of income protection.

Confused by your response ....I thought by definition that PHI IS Critical illness cover but you started by saying "PHI is proper income protection in its conventional sense". This seems contradictory. Additionally I was under the impression (or at least I was told when taking out my cover) that any of the PPI covers could be customized to be standalone unemployment covers with lesser or broader cover options i.e. the different PPI insurances or could be full ASU cover (or just Accident & Sickness). Think I should just stick to science, its way easier to understand than all this insurance jargon. Could you clarify for me? I do realise that PPI are more budget in their standing.
Thanks in advance,
J.

dunstonh

.I thought by definition that PHI IS Critical illness

CI cover is not the same as PHI. Very different.

PHI is underwritten at point of sale with full health disclosure (and checks where necessary). It can have guaranteed premiums and cannot be cancelled by the insurer. It will also pay out until the selected final age (typically to match your retirement). It is very hard for an insurer to wriggle out of paying on a PHI as they have all the info up front.

MPPI/PPI is effectively underwritten at point of claim. Its much easier for them to get out of paying. Reflected in the stats from 2006 that had over 80% of PPI claims rejected (all types of PPI though, not just budget income protections).

CI cover will pay out a lump sum payment on diagnosis of a range of specified critical illnesses.

Standalone unemployment plans are just like MPPI/PPI but with unemployment only.

Standalone U can be better if your employer has sickness benefits as the insurer cannot pay more than around 75% of your income on a claim. If the employer is paying sickness benefits at 100% then you will not get a penny from the insurer. If the employer is paying 50% then you will get 16-25% from the insurer. So, those on say 6 months full pay, 6 months half pay will find PPI is largely a waste of money. A PHI to fit when the sick pay ends and standalone U cover may not only offer better cover but could even be cheaper as you are not paying for something you cannot claim on.

homeadvice_2

CI cover is not the same as PHI. Very different.

PHI is underwritten at point of sale with full health disclosure (and checks where necessary). It can have guaranteed premiums and cannot be cancelled by the insurer. It will also pay out until the selected final age (typically to match your retirement). It is very hard for an insurer to wriggle out of paying on a PHI as they have all the info up front.

I see, that makes sense.

MPPI/PPI is effectively underwritten at point of claim. Its much easier for them to get out of paying. Reflected in the stats from 2006 that had over 80% of PPI claims rejected (all types of PPI though, not just budget income protections).

CI cover will pay out a lump sum payment on diagnosis of a range of specified critical illnesses.

Yeah I had heard that loan payment protection was a real issue, especially when it was found that alot of high street banks etc were mis-selling to people who were not even eligable to get this type of cover. Glad the FSA got involved and cleaned the whole thing up.

Standalone unemployment plans are just like MPPI/PPI but with unemployment only.

Just as I thought.

Standalone U can be better if your employer has sickness benefits as the insurer cannot pay more than around 75% of your income on a claim. If the employer is paying sickness benefits at 100% then you will not get a penny from the insurer. If the employer is paying 50% then you will get 16-25% from the insurer. So, those on say 6 months full pay, 6 months half pay will find PPI is largely a waste of money. A PHI to fit when the sick pay ends and standalone U cover may not only offer better cover but could even be cheaper as you are not paying for something you cannot claim on.

Sage advice I would say, glad we are both on the same page. Thanks for clearing that up. Appreciated as always.
Cheers,
J.

OshayAway

homeadvice wrote: »

Hi ...got to admit you got me with PHI, was not even sure what that was! Had a google and think I have got it now. I'm assuming your refering to Perminant Health Insurance? If that is the case then I think you have your wires crossed. From what I've read, its understandable since the two products have names that are way too simular what you refer to is income protection insurance (IPI) which is a form of critical illness cover. What I have bought is income payment protection (IPP) which is a form of PPI. The major difference between the two being that IPP covers redundancy (at a small extra cost to me :cool:) which is something that no PHI covers. From how I understand it, PPI is the only form of cover that supports this eventuality, in the UK at least. So if your worried about the recession then income payment protection or mortgage payment protection are your only real options. If I have got this wrong then please point out the error of my ways.
Cheers,
J.

Just about to get on my high horse by the name of 'Righteous Indignation' and realised others have already stepped in and answered the points you've raised.

I would just add that forgetting about the redundancy / unemployment side of things for a minute, in terms of a policy paying out an income in the event of you being unable to work for health reasons, PHI (true income protection) beats ASU / MPPI / PPI / your policy hands down. This is due to the fact that they have far more exclusions in place than the alternative. For example, most do not cover the most common reasons that people are signed off sick for. Check your own documentation under exclusions.

homeadvice_2

OshayAway wrote: »

Just about to get on my high horse by the name of 'Righteous Indignation' and realised others have already stepped in and answered the points you've raised.

I would just add that forgetting about the redundancy / unemployment side of things for a minute, in terms of a policy paying out an income in the event of you being unable to work for health reasons, PHI (true income protection) beats ASU / MPPI / PPI / your policy hands down. This is due to the fact that they have far more exclusions in place than the alternative. For example, most do not cover the most common reasons that people are signed off sick for. Check your own documentation under exclusions.

Why is it that I feel like I'm being attacked by you over my choices ...point in fact accident & sickness was a secondary concern to me. If you read my origional post I was looking for cover in the UNLIKELY event that I would be made redundant. While I totally agree that PHI cover is more comprehensive in its nature (thanks dunstonh for all your helpfull info) & subject to less exclusions it also very expensive and doesn't include any unemployment cover. The best option is obviously combined PHI & unemployment only but this would be very, very, very expensive! Me like most Joe averages do not have the cash in these times to take out this type of cover & in addition most of us are worried more about being made redundant rather than falling sick or having an accident. Having SOME sickness & accident cover is the bonus here (rather than as you see it, unemployment being the bonus) but not the impetus for taking out the cover in the first place.
My response to you was to the question:

"What reason? looks like the site you refer to doesn't even offer PHI."

was valid, as I never said I was looking for PHI and was always looking for some form of ASU. I simply explained how I could get IPP cover from a site which doesn't offer PHI (or 'true income protection') I do not think you ever had a right to get on your horse in the name of 'Righteous Indignation'. Perhapse we have mis-understood each other and I do not mean to be bullish in my reply but to be honest that is how you have treated with me. What I have is ideal for my circumstances and I'm pretty sure many others in situations simular to mine will feel the same.
Regards,
J.

lisyloo

What you need is very dependent on individual circumstances.
For example, I've been with my employer nearly 10 years and would get a decent redundancy pakage, so I don't have a big concern in that area.
Others may have no redundancy pakage at all.

Insurance is expensive so it's always a trade-off.
If you paid for everything you'd have no money, so we all have to make a compromise.

I would advise everyone to find out what their employer offers before looking elsewhere (ask HR or get the handbook).
Some employers offer sick pay, death-in-service benefits, PHI, private medical etc. and some offer better than statutory redundancy packages.
Even if there is no extra redundancy there is still a statutory package they have to offer (which you EVEN get if they do bust - eventually).

The choices that individuals make don't fall into the category or right or wrong as it depends on your cirucmstances (dependent, working spouse, job security, length of time in job), you employee benefits and your attitude to risk.

Personally I consider PHI much better than CI, but that might not be the case for everyone.

OshayAway

homeadvice wrote: »

Why is it that I feel like I'm being attacked by you over my choices ...point in fact accident & sickness was a secondary concern to me. If you read my origional post I was looking for cover in the UNLIKELY event that I would be made redundant. While I totally agree that PHI cover is more comprehensive in its nature (thanks dunstonh for all your helpfull info) & subject to less exclusions it also very expensive and doesn't include any unemployment cover. The best option is obviously combined PHI & unemployment only but this would be very, very, very expensive! Me like most Joe averages do not have the cash in these times to take out this type of cover & in addition most of us are worried more about being made redundant rather than falling sick or having an accident. Having SOME sickness & accident cover is the bonus here (rather than as you see it, unemployment being the bonus) but not the impetus for taking out the cover in the first place.
My response to you was to the question:

"What reason? looks like the site you refer to doesn't even offer PHI."

was valid, as I never said I was looking for PHI and was always looking for some form of ASU. I simply explained how I could get IPP cover from a site which doesn't offer PHI (or 'true income protection') I do not think you ever had a right to get on your horse in the name of 'Righteous Indignation'. Perhapse we have mis-understood each other and I do not mean to be bullish in my reply but to be honest that is how you have treated with me. What I have is ideal for my circumstances and I'm pretty sure many others in situations simular to mine will feel the same.
Regards,
J.

Homeadvice, please accept my unreserved appologies if I have come across as attacking you over your choices. They are after all your choices to make. The information I have provided as simply been posted in an effort to help, not hinder.

My original post was simply a response because it seemed you may have been confusing the options and types of cover. There is no shame in that due to the fact that, as you mentioned yourself, many do sound similar. In your post (#71) you explained that as a result of the helpful threads you received, especially dunstonh, you decided to opt for PPI. This was a surprise to me as the reply to your post (#68) was to consider PHI (#69). You went on thank dunstonh and say you will “keep that in mind” (#70). You then state in your following post (#71) that you “took the plung with Legal & General income payment protection. Decided not to go with MPPI due to the reasons sited in this thread” This is not PHI and caused me to think that any reasons that put you off MPPI would surely apply to the cover you have taken out as it is PPI.

You then go on to tell me I’ve got my wires crossed and confused PHI with IPI (which doesn’t even exist) and that this is a form of critical illness cover! That is what prompted my (tongue-in-cheek) expression about getting on my high horse. It was not meant to patronise.

I’m not sure what research you have done yourself, or even if you have had any quotes or advice on PHI. It occurred to me that you may have been influenced by the comments on the site you referred to which states “Many health insurance policies will provide you with a proportion of your salary should you become unable to work due to ill health. This type of insurance is more expensive but does pay for longer periods of time. Health insurance does not insure you should you be made redundant so it is worth getting mortgage payment protection to cover for this. ASU insurance can be used in conjunction with health insurance to cover you for all eventualities.” I very much doubt this wording is even compliant from the FSA’s point of view as the company dies not even offer PHI so would not be authorised to ‘advise’ on it.

[FONT=&quot]In view of the foregoing, I though it may be helpful to you to properly consider PHI as it is far more comprehensive than the AS part of MPPI / PPI which has many exclusions therefore making it far less likely to pay out. Some providers will allow a limited payment period e.g. 24 months to bring the premium down so it may cost less than you think.[/FONT]