Should i use an IFA to buy PPI or trust 'the net'?

buel

Hi there, im 33 and in good health but i am quite keen on getting some sort of income protection (rent, one credit card bill, utility bills etc) should the manufacturing company i work for lose work in the future, being as manufacturing isn't doing too well at the moment. My problem is i dont know whether to trust the ones you can purchase online such as:

http://www.comparethemarket.com/income-protection-insurance/

or to go to a 'proper' ifa and either pay commission or a lump sum upfront for him/her to find a good deal. Also, i was under the impression that if i were to take out income protection with an ifa and then it doesn't pay out for some reason i hadn't thought of or wasn't prepared for then at least i would have someone to.....well, not 'blame' but you see what i mean? Basically i just dont want to make a silly mistake and regret not having got a specialist to check it for me! I do hope i dont sound silly or a user, i really dont mind paying an ifa for advice but i dont want to if i dont have to!
I hope i have phrased this question properly..!

dunstonh

or to go to a 'proper' ifa and either pay commission or a lump sum upfront for him/her to find a good deal.

As well as having access to better quality income protections such as permanent health insurance.

Also, i was under the impression that if i were to take out income protection with an ifa and then it doesn't pay out for some reason i hadn't thought of or wasn't prepared for then at least i would have someone to.....well, not 'blame' but you see what i mean?

You get consumer protection on the suitability of the product to meet the needs and objectives. You dont get that if you DIY.

Basically, if you want PHI then you will need to see an IFA as internet coverage on PHI is minimal at best. If you want PPI then an IFA wont match the internet prices but then many of the internet plans are budget plans and are responsible for the issues of PPI increases (and later limited refunds) of the last 2 years. Those that went with Ant for insurance have found they are not paying refunds as they have a loophole that would not exist on advised plans.

buel

Those that went with Ant for insurance have found they are not paying refunds as they have a loophole that would not exist on advised plans.

Please can i ask you to expand on this?

dunstonh

buel wrote: »

Those that went with Ant for insurance have found they are not paying refunds as they have a loophole that would not exist on advised plans.
Please can i ask you to expand on this?

There is a thread in the reclaims PPI section about it.

Basically, premiums on PPI are not guaranteed. They are reviewable and will go up and down. A lot of internet companies PPI companies popped up offering ridiculously low rates during the good years that were unsustainable during the bad. So, they increased their premiums, often massively. The mainstream providers had also lowered theirs in the good years (not as much) and increased them in the bad (but not as much).

The problem was that a very large number of the providers didnt have it in the policy documentation that the premiums were reviewable. So, an agreement was made with all PPI providers that they would refund the increases before 2010 and give notice of the new premiums for 2010 onwards with a few rules in place. This was a mandatory action set by the FSA on all providers.

However, that provider found a loophole and is exploiting it. It changed underwriter during the period and is classing that as a new policy and therefore there was no increase on the existing policy and they dont have to refund it (or more or less to that effect).

foggytown

If you choose to go the IFA route, do yourself a favour and talk to several. Remember that an IFA is like any other commision-based activity: if they don't sell, they don't eat. There is also no guaranty of expertise and some have a better line in "flannel and blag" than they do of knowledge. Don't be afraid of bruising them. If they can't answer difficult questions about their commissions, experience, whether they have even been complained against, etc. - they shouldn't expect to enjoy your custom.

buel

Thank you for the advice!
Ok, i am going to see an ifa tomorrow, i asked if i can choose to either pay him a lump sum for his advice or to pay him commission, he said that being an ifa means that the consumer gets the choice! Am i correct in thinking that paying a sum is a much much better idea than commission please? Oh and are there any questions i should ask? I want income protection (to cover rent of £445, one credit card payment of £30 per month and maybe the utility bills which total £90) rather than health cover!

dunstonh

he said that being an ifa means that the consumer gets the choice!

That is correct. Until the end of 2012 you get to choose.

Am i correct in thinking that paying a sum is a much much better idea than commission please?

on investments and pensions it often is. However, on insurance it often isnt. The reason for that is some providers do not allow a nil commission option. So do. You could ask the IFA to compare the nil commission/fee based option vs the commission option. The other thing you may find is the breakeven point is so many years ahead that its better to go commission.

buel

Thank you so much for your help!!!

buel

Hi again! Well my trip the IFA didn't go as well as i hoped! After 20minutes of him showing me various documentation the various providers, i asked him if they were redundancy/income protection quotes+he said that they were health/income protection quotes+he hadn't realised that that was what i wanted(i thought id made it quite clear), he then seemed to lose interest, mentioned that there were very few providers offering redundancy cover+said he would make a few calls+let me know! He then wouldn't let me take the copy of the quotes he had shown me for health insurance+wrote down a few of the quotes but not who they were with! I have still to hear from him.....

foggytown

buel wrote: »

Hi again! Well my trip the IFA didn't go as well as i hoped! After 20minutes of him showing me various documentation the various providers, i asked him if they were redundancy/income protection quotes+he said that they were health/income protection quotes+he hadn't realised that that was what i wanted(i thought id made it quite clear), he then seemed to lose interest, mentioned that there were very few providers offering redundancy cover+said he would make a few calls+let me know! He then wouldn't let me take the copy of the quotes he had shown me for health insurance+wrote down a few of the quotes but not who they were with! I have still to hear from him.....

Well, you were a warm body that walked through the door so he took a shot at trying to interest you in something you weren't interested in. Now you know. When you contact other IFAs ask them POINT BLANK if they have any providers that do redundancy insurance, yes or no.

barnishroader

Hi,
I wanted to ask:
When obtaining a quote for PPI, is the amount i require to cover the amount i pay each month for the loan or just how much i would like to be paid out?
It's just i'm not sure if i need to cover the amount for a specific loan or my monthly income.

I have a 5 year £17500 loan with Tesco and i didn't take out PPI at the time.
My monthly payments are £382 but if i lost my job i obviously have other payments to make such as my mortgage so would i need to quote to cover all my outgoings or my salary.

The situation at my work isn't looking great at the minute and just worried what will happen if i lose my job.