Income Protection Plans

resusannie

I'd be really grateful for some advice! I'm a first time buyer getting a mortgage and realise I need to get some income protection plan. I'm in a 'class 3' job (ambulance driver) so need some sort of coverage incase of back injuries, and obviously other critical illnesses. Even though my jobs pretty secure I'm also interested in some kind of unemployment cover on the insurance. I've been quoted around £50 per month, which I thought sounded high on a 25 year £80,000 mortgage. Is this so? Thanks in advance.

dunstonh

permanent health insurance isn't linked to a mortgage. It is linked to occupation, health status, age, deferment period, length of cover and smoking status. It can also be influenced by level vs annually increasing cover.

Perhaps the first thing to consider is are you looking for permanent health insurance or mortgage accident, sickness and unemployment cover? I would guess PHI from your comments but you mention mortgage so perhaps not.

resusannie

Thanks for your reply, dunstonh, I really want to get the sort of cover that carrys on paying your mortgage if you are unable to work due to and accident or illness.

dunstonh

Both PHI and ASU (initials of cover mentioned before) will pay an income on those two events. PHI will pay after the deferment period upto a maximum of your selected end date (which is usually retirement age). ASU will pay after a much shorter deferment period (usually) but cease after 12 months (normally). PHI is underwritten to your health and occupation. ASU is a general insurance policy which is not underwritten on your health.

PHI is more comprehensive and wider ranging than ASU. Often a combination is the best approach with the PHI having a deferment period of 12 months and the ASU covering that 12 months. Whilst it is two policies, it is often the cheapest and most sensible way to go with class 3/4 occupations.