Income Protection Plans

The_Jester

I've recently been re-evaluating my insurance plans with an independent financial advisor.

He's trying to push an income protection plan for me which guarantees me £21,000 pa until I'm 65. It's costing £43 pm.

As like most of you I'm quite sceptical of these advisors as many (not all) only want the commission.

I've spoken to several of my friends who have or have had them and all of them tell me they are a complate con. One of them has been fighting for a claim for two years.

What is everyone's general opinion of them?

ACG

Im probably biased in your eyes (but im not as its not me earning the commission).

Income Protection (IP) to me is the best contract on the market. If your unable to work after your sick pay stops your relying on the pittence the govt give you...and thats providing you can jump through their hoops.

IP (presuming its own occupation) is easier to claim on and you get more money than if you were on sickness benefits.

the average claim for sickness is around 6-7 years. I couldnt survive on £100 a week for 6 years. If you can or have savings in place then you may not need it. I dont though.

Just to put my money where my mouth is.... out of all of the insurance/protection products i sell (Life, CI, IP etc) Income Protection is the only one i have in place. Once i have kids ill take out life insurance too.

But until then IP is the only policy i feel i need.

dunstonh

As like most of you I'm quite sceptical of these advisors as many (not all) only want the commission.

Really? That statistics dont verify that. Independent financial advisers account for the majority of regulated advice transactions. Yet only account for 1% of complaints at the FOS and a number that has been falling each year for a long time. Surveys have found that IFAs were the only financial type that have not seen their reputation fall in the credit crunch. Another survey found that that IFAs are placed higher than accountants for advice.

Now if you were talking about FAs rather than IFAs then I would largely agree. FAs are the cause of so many problems. Research found that over half the people seeing FAs thought they were seeing IFAs. They do us no favours.

I've spoken to several of my friends who have or have had them and all of them tell me they are a complate con. One of them has been fighting for a claim for two years.

I bet your friends havent had them and are mixing up PPI with PHI. PPI is a low quality budget plan offered by general insurance companies to provide replacement income for about 1 or 2 years. It is underwritten at point of claim. Not point of sale. PHI is long term insurance offered by life assurance companies fully underwritten at point sale and will pay out to a selected end age.

I would take PHI over PPI any day. PHI is generally regarded as a valuable prodcut that everyone should have. PPI is generally regarded as a waste of time for many people (perhaps MPPI excluded). PHI also comes in different levels of cover. There are some budget plans, standard and comprehensive versions. Budget ones are usually poor quality but then that is the same for any area where you buy budget things.

You are being recommended PHI. Are you freinds on about PHI or PPI? If PHI, are they on about budget, standard or comprehensive versions of the plans?

The_Jester

Dunstonh,

I assume by the terms PPI & PHI you refer to payment protection insurance and permanent health insurance?

dunstonh

yes i am...

phill99

You need 3 insurances in life:

Car insurance as its a legal requirement
House insurance as it protects your major asset and everything in it
Life insurance as it provides security for your family if you spark your clogs

The rest is just a random range of products invented by the insurance industry for the benefit of the insurance industry.

The_Jester

dunstonh wrote: »

yes i am...

My friends know the difference between PPI and PHI.

ACG

phill99 wrote: »

You need 3 insurances in life:

Car insurance as its a legal requirement
House insurance as it protects your major asset and everything in it
Life insurance as it provides security for your family if you spark your clogs

The rest is just a random range of products invented by the insurance industry for the benefit of the insurance industry.

I disagree. If you have no family then you have no need for life insurance. But you may still need PHI.

Wutang_2

phill99 wrote: »

You need 3 insurances in life:

Car insurance as its a legal requirement
House insurance as it protects your major asset and everything in it
Life insurance as it provides security for your family if you spark your clogs

The rest is just a random range of products invented by the insurance industry for the benefit of the insurance industry.

You should keep quiet

phill99

Wutang wrote: »

You should keep quiet

Why is that? It's an open forum and I'm entitled to offer my opinion just as much as the next person. If you don't like it, then don't get involved in public forums.

Maybe you're involved in the insurance industry and don' like your little games to be exposed because you know it will reduce your income?

All the time the insurance industry remunerated its sale force through commission, people will always. E sold things they don't need.

Wutang_2

phill99 wrote: »

Why is that? It's an open forum and I'm entitled to offer my opinion just as much as the next person. If you don't like it, then don't get involved in public forums.

Maybe you're involved in the insurance industry and don' like your little games to be exposed because you know it will reduce your income?

All the time the insurance industry remunerated its sale force through commission, people will always. E sold things they don't need.

Its an open forum but don't get involved? BOOM master strike:money: