PPI / Income Protection

jamief

Im just about to take out my first mortage with my fiancée, and we are considering what kind of payment protection to go for; she is a trainee solicitor, so in a stable job, whereas I don't have a huge amount of job security, but could find something else fairly easily given 2-3 months. Would we be better with the kind of standard PPI (through an independent insurance seller), or "Income Protection Insurance" (although I don't know much about this).....

herbiesjp

Mortgage Payment protection covers you for Accident Sickness or unemployment, and cover the mortgage payments for up to 1 or 2 years.

Income protection will cover a percentage of your gross income up until a specified date - some people set it up until retirement, some only have it for the term of the mortgage.

Income protection is medically underwitten (unlike mortgage protection) and cannot be stopped by the provider. Income protection keeps running for the term however mortgage protection is renewed annually.

Forgot to say income protection does not cover against unemployment

HTH

jamief

Okay...sounds like I definately want Mortgage payment protection. Anyone I should look at / avoid for this? Mortgage is with Nationwide just now, if that makes any difference....

dunstonh

I would have thought a trainee solicitor would have been better off with PHI rather than ASU.

Job is stable so unemployment not likely. That leaves accident and sickness and PHI is the far better option when it comes to covering those two.

ASU/MPPI = accident, sickness and unemployment
PHI - permanent health insurance (income protection).

jamief

Well, for her it sounds like PHI is the better option, but Im not in that line of work - I'm a software engineer, and am currently working for a small company, and am likely to be working for small companies in the future, so I would think that unemployment would be my biggest worry......

herbiesjp

If that is the case then you can either take a full ASU policy, or if only unemployment concerns you, you can opt for an Unemployment Only policy

HTH

jamief

Thanks!

Who should I look at / and who should I avoid?

dunstonh

We cannot recommend companies as it would put us in breach of the FSA rules as they are regulated products.

Part of the reason is highlighted often on the forums where you get people mention who they have as a "recommendation" but they have never claimed, dont know anything about the policy or the company and often think its something else to what they really have. There was a PHI thread in insurance section a few days ago where people were naming their ASU companies thinking it was the same thing.

If its PHI you are after, then there are so may variables that change with occupation, gender, smoking status, term and sum assured along with level of cover that the best company quoting will be different from one person to another. We could name one company that is best value for one person but comes out worst for anohter.