Income Protection Plans

ok_c

I'm looking around at IP plans, and all the ones that google brings up are the ones that cover Accident, Sickness and Unemployment for upto 12 months.

I was looking for something that covers a longer period, but I can't seem to find any information on it.

I've been told by my mortgage lender (A&L) that they offer these policies and I have to go in to get a quote. How much should I be looking to pay for these types of policy? And what should/shoudn't be included in the policy?

Edit: Also, I've been "strongly" reccomended by A&L to take out Life/Critical illness cover. Is this needed if I have no dependancies? Or is a full IP plan a good alternative?

Thanks

dunstonh

permanent health insurance is the name of the cover you need. It doesnt have good online coverage as there are many differences between providers and each provider usually has a couple of different options to match budget.

I have to go in to get a quote

No you dont. If they are insisting on that, then they are in breach of the rules regarding lending.

How much should I be looking to pay for these types of policy?

£10 through to £300 a month depending on your income, occupation, level of cover and age.

And what should/shoudn't be included in the policy?

Its not really a case of what you choose or not choose to include. Its a case of getting the right deferment period, right level of cover, right expiry age and not going with a budget plan that is virtually useless.

Edit: Also, I've been "strongly" reccomended by A&L to take out Life/Critical illness cover. Is this needed if I have no dependancies? Or is a full IP plan a good alternative

You dont need life cover and CI come in the pecking order after PHI.

Remember A&L are not financial advisers by tied salesmen. They have a job to sell you as much as they can.

ok_c

Thanks for your help. I was thinking of giving Endsleigh a call, and getting some quotes from them. What are they like to deal with, reputable?

dunstonh

no experience of using them. I have just done a quick check on the research software and they dont appear in the provider list as offering PHI to whole of market. That said, there are some companies that will not release their data to the research companies to be included. Usually this is because they have substandard plans or dont deal in the "whole of market" distribution channels.

Going direct to provider is not normally the best way of doing these things. They rarely discount and in some cases, the direct product is of lower quality as they need to keep it simplified for direct sales.

ok_c

If thats the case, is there anyone you could reccomend looking at, or is it best to speak to an IFA?

Thanks again

dunstonh

the problem with recommending one is looking at what compromises you are willing to take. I have never known anyone take the best cover and maximum coverage.

Once you start compromising on things, the companies will be different depending on where you compromise. This is generally why you dont see much PHI coverage on the internet. There are far too many variables (unlike house, car and life assurance where the options are fairly standardised).

Commission isnt very high on PHI either (possibly another reason why internet companies havent gone big on it as they do like to cherry pick the profitable stuff on the whole). So, I dont think there is any reason not to get your local IFA out to do a quote. If you do, make sure its not just premium but also coverage that is looked at. A decent IFA would have the software required to show you the differences and give you the opportunity to play around with the figures and companies to see what comes out best for you.

ok_c

Ok, I'll look into seeking advice from an IFA then. Thanks again for your help, much appreciated.

jasonking

Some online IFA's can give advice and quotes over the phone on Income Protection (PHI) if you look around the internet