Help Please! Payment protection

NicolaH_2

Hi. I'm currently due to complete on a flat 1st Aug. I have been looking at what type of protection to take out for my mortgage/income if anything should happen to me.

I'm looking at Combined ASU with AntInsurance which can cover me for £1000 per month (£21 per month premium) which will cover income payment as well as my mortgage payment if I was to have an accident, sickness or become unemployed.

I want to protect my income as well, eg. credit cards and loan, bills if anything does happen, but I'm getting very confused as I wanted to clarify that the policy would pay out if need be.

I would receive 6 months full pay then go onto half pay after that (not sure how long this would last).

Am I wasting my money doing ASU altogether as I have a good benefit from my employer, or should I just do unemployment cover.

I have no dependents, but just want to be covered.

Any help would be appreciated...

lovelldr

Am going through similar problem myself.

We are taking a mortgage of about 170k, and so this is a large amount of money to not be able to pay on. But we have been getting quotes on income protection which would pay out for life if we had an accident/injury, and for me, the quote is £15p/m, but my partner being a teacher has a quote of £60 p/m... And then we were considering Life/Critical illness, at another £65 p/m. So it's all confusing as to what to take etc...

As for ASU, that only pays out for a maximum of 12months usually (dependant on which product you get). But then again, are you going to be off that long? But if you had a car crash, and in wheelchair rest of life, might need to take the Income Protection...

It's all dependent on the risks you're prepared to take, and how much you can afford...

MortgageMamma

You might be better looking at a long term product now such as permanent health insurance. if you became long term sick or disabled it could pay you an income of up to 75% of your earnings until retirement if necessary. Unlike mortgage payment protection these are medically underwritten and are designed as long term plans. The longer you select to go before making a claim (known as a deferred period) the cheaper the premium. The policies vary widely between insurers so you would need financial advice on this. The younger you are when you take this the cheaper the premium is, another bonus is that the policy cannot be cancelled by the insurer after you make a claim, hence the name permanent.

Snippy30

Does this not cost a fortune though? I looked at this on the internet last month and was quoted 46 per month for a 25k salary

MortgageMamma

it very much depends on a number of factors, such as how old you are, smoker status, amount you earn/cover required, RPI linked options etc etc.

lowis

i read a tip on here somewhere that it may be cheaper to take out an ASU policy AND a long term PHI plan

you defer the PHI plan for 52 weeks - basically the term the ASU will cover you for i.e. you claim your ASU for 52 weeks and then the PHI kicks in.

I was looking into this until recently but it seems my american employer has me covered with 'disability' insurance through UNUM.

NicolaH_2

Thanks for all your replies..

I think ASU would suit me for my mortgage and income protection but I'm just trying to clarify at the moment when the policy would kick in.

I'm looking at ASU with antinsurance for 12 months cover. It states in the T&C's that it will not pay out if I'm still in receipt of full income.

For the first 6 months if I was off sick for example I would be on full pay then after that go on half pay. Does anyone know when the Statutory sick pay would kick in? and if it does kick in after the first 6 months would this policy only pay me out for 6 months?

Are all payment protection policies like this?

Thanks for any help..

hethmar

Im not an expert, but my son recently swopped to Pinnacle Insurance to cover his mortgage payments plus utilities etc. The cost went down from £22 a month to £8. He did this following the advice on this site re young persons - under 30. I know its nice to be reassured but if there are two of you you are fit and you have employees benefits and no dependents do you need to be spending so much money at this time on long term sickness insurance?

HelpWhereIcan

NicolaH wrote:

Thanks for all your replies..

I think ASU would suit me for my mortgage and income protection but I'm just trying to clarify at the moment when the policy would kick in.

I'm looking at ASU with antinsurance for 12 months cover. It states in the T&C's that it will not pay out if I'm still in receipt of full income.

For the first 6 months if I was off sick for example I would be on full pay then after that go on half pay. Does anyone know when the Statutory sick pay would kick in? and if it does kick in after the first 6 months would this policy only pay me out for 6 months?

Are all payment protection policies like this?

Thanks for any help..

Most ASU policies will not pay out for as long as you are still in receipt from your employer. In your case, this could be up to 12 months depending on the insurer and you would need to check that the policy payment period (normally 12 months) does not start ticking until they actually start paying.

Based on what you have posted, I would suggest that it may be beneficial for you to arrange a Redundancy only policy and a PHI policy with a deferred period of between 6 & 12 months (depending on your income and what you would need to have coming in at the 6 month point).

That way, your income would be protected against redundancy (30 day deferred period) and the PHI policy would be there to take over when your employer stops paying you. As has been mentioned, a deferred period of 12 months would make PHI premiums very competitive.

The other thing to bear in mind is that the PHI will pay out intil you return to work, die or reach retirement age unlike an ASU plan that may payout for a max 12-24 months so the protection is a lot better. Plus, as MM says, the policy is medically underwritten and the policy conditions can be a lot less general, all adding to the level of protection.

I would say to get advice, although there are one or two sites around that will provide online quotes for PHI and MPPI.

Hope this helps