Income protection, which one?

spa_3

Due to marriage and the arrival of a baby J I’ve been thinking about protection for my family.

I‘ve had a mortgage protection policy covering ‘unemployment only’ for the last sever years continuously. I never paid any attention to it but suddenly realised I’m being royally ripped off by Paymentsheild (seen a few other posts about them recently), they want £34.16/mth for £800 cover starting at 30 days, which is a 25% increase in premium on top of an already expensive premium. I will certainly be changing companies. So I have a few questions:

1. I basically want to cover myself in case I can’t earn for a period of time due an accident or illness that would prevent me from doing my job/or similar. I’d want this cover to also work if I was made unemployed in case I fell ill during that period. I’ve considered critical illness but they only cover specific illnesses/diseases. What if, through no fault of your own, you get some other debilitating illness that isn’t on the list – you’re stuffed. What’s my best option here?

2. I want to continue with an unemployment mortgage protection policy – does it make sense to wrap it up with an illness type policy?

3. I also want to take out joint life insurance – should I wrap that up with the policies above as well or do them separately?

I appreciate there’s a few issues here but would really welcome some independent thoughts on what is the best path forwards is.

Many thanks.

dunstonh

I never paid any attention to it but suddenly realised I’m being royally ripped off by Paymentsheild (seen a few other posts about them recently), they want £34.16/mth for £800 cover starting at 30 days, which is a 25% increase in premium on top of an already expensive premium.

I doubt you will find you are being ripped off when you compare like for like.

1. I basically want to cover myself in case I can’t earn for a period of time due an accident or illness that would prevent me from doing my job/or similar. I’d want this cover to also work if I was made unemployed in case I fell ill during that period. I’ve considered critical illness but they only cover specific illnesses/diseases. What if, through no fault of your own, you get some other debilitating illness that isn’t on the list – you’re stuffed. What’s my best option here?

permanent health insurance (PHI)

2. I want to continue with an unemployment mortgage protection policy – does it make sense to wrap it up with an illness type policy?

Not usually. PPI plans are budget income protection options. It really depends on the quality you are after. You have to decide if you want cheap and cheerful that may make you happy that you are not paying much but may be pretty useless or substandard if you claim or pay a bit more and be correctly covered.

3. I also want to take out joint life insurance – should I wrap that up with the policies above as well or do them separately?

Most plans dont do joint or if they do, its compromised by the sum insured.

Wutang_2

How come so many people think they are being ripped off??

spa_3

It a basic cover of unemployemnt only up to £800 of my mortgage with a 30 day start period. I don't think there is anything else included, not A&S, just U.

I popped those requirements into moneysupermarket and and out of 30 responses mine was the most expensive. There were several quotes around £18 and included A&S. So unless I was missing something it seems really expensive by contrast.

I don't mind paying good money for good cover as I know PHI can be more expensive because it does more. I just want to get an idea what my best option is and get the best value for the level of cover.

dunstonh

Wutang wrote: »

How come so many people think they are being ripped off??

Because that is the mantra of this site. If you are paying for something you are being ripped off because its either illegal or you being conned

rita13

HI,
BE VERY, VERY CAREFUL WHEN TAKING OUT A MORTGAGE PROTECTION PLAN OR PROTECTION PLANS FOR LOANS AND CREDIT CARDS BECAUSE IF YOU GO BACK TO WORK AT SOME POINT AND WORK FOR AN EMPLOYMENT AGENCY EVEN IF YOU ADHERE TO ALL THE POLICIES OTHER REQUIREMENTS, THEY WILL NOT PAY OUT ON THE POLICY - THIS ALSO APPLIES TO PPI'S FOR LOANS AND CREDIT CARDS, AND THEY WILL NOT REFUND THE PREMIUMS YOU HAVE PAID TO THEM - WE KNOW BECAUSE IT HAS HAPPENED TO US!!!:eek:

dunstonh

BECAUSE IF YOU GO BACK TO WORK AT SOME POINT

The point of the plans is to cover periods when you are not working. Not to keep paying out if you are.

It is also not a good idea to treat loan/credit card PPI the same as MPPI/standalone PPI or permanent health insurance (income protection) as all being the same thing.

jamesd

rita13 wrote: »

IF YOU GO BACK TO WORK AT SOME POINT THEY WILL NOT PAY OUT ON THE POLICY

So? Surely you don't expect to get unemployment benefit when you're working again? Same deal here.

sal_strawberry

We have Legal and general Unemployment insurance, accident and sickness for myself and partner and it pays £1200 a month should one of us make a claim. Cost is £46 a month.