MPPI same as income protection?

Blondie27

I currently have a MPPI policy for sickness and disability only. Is mortgage payment protection insurance the same as income protection? Is IP just another name for it?

Does anyone know of any good policies as I would like to review ours.

Also have CIC and am going to look at replacing with permanent health insurance after reading MArtin's article.

somewhatnew

Hi

MPPI & ASU policies typically pays out for 1 or 2 years and are normally one claim only. They are not underwritten and there are normally several exclusions. They are poor policies in that regard - as a broker I try and avoid selling it.

PHI is also known as income protection insurance. It covers your income for, say, 30 years and if you were off work for 30 years ill it would then pay out for the full term. It is medically underwritten, typically limiting you to 50% of your salary (tax-free) + state benefits (if you get a good policy), and should have no exclusions. i.e. if you cant work it pays out. You can also make as many claims as you want for the same condition if it reoccurs or for any other condition that keeps you off work.

Unless you get income protection through work you should always go for IPI over CIC as your always going to need money and state benefits if you are ill are quite dire.

kevin_c_3

they are similar in that both provide an income if you cant work due to illness (or potentially unemployment) but they are very different when it comes to the benefits and typically IP is considerably better than PPI/MPPI for the following reasons:

- terms and conditions are fixed, rather than being subject to 30 days notice
- premiums can be guaranteed for the term of the policy
- in the case of ill health IP pays until you either return to work or the policy ends (age 65 for example) instead of just 1-2 yrs
- IP doesn't come with automatic exclusions such as back pain or stress, which are common with PPI/MPPI
- IP can come with 'own occupation' definiiton of being unable to work, which is better than the others
- IP doesn't automatically exclude pre-existing conditions

IP doesn't include Unemployment cover, however, this can be added with some/most companies

Price wise it very much depends on your circumstances (Age, sex, health, occupation, amount of cover etc) as to which would be cheaper, but IP is often better value for money