FIB - Scottish Provident

jonny2510

I'm looking to arrange a (Family Income Benefit) policy providing a regular (fixed) monthly payment to be made to my wife (for the term of the policy) should I end up meeting an unfortunate end.

The cheapest (guaranteed) policy I've found so far is a Scottish Provident Self Assurance Term Personal policy.

I'm just about to make my way through the documentation, before committing to buy, but was wondering if anyone in the know could offer comment on the policy, Scottish Provident on the whole, or perhaps point out if there's anything in particular I need to be aware of with this particular policy?

I'm looking purely for cover if I die, not critical illness, disability or unemployment etc...

ACG

Answers the questions correctly and fully - if unsure check with them.
Have a look if the premiums are guaranteed or reviewable.
Have a look at waiver of premium - it only costs a few pence.

Scot Prov are a fairly reputable company - some issues in the past but i think those are behind them.

Life insurance is life insurance, if you die it pays out.

One thing you have said though...
If you die and your income stops you are putting cover in place.
If you were off work for longer than your works sick pay...presumably your income stops. So not only do your family have to feed themselves they then have to care for you also. PHI is something i think most people should atleast read up on.

weighty1_2

ACG makes a great point! Your family could be in greater difficulty if you are long term ill than if you die. What if your wife cannot work as you need help around the home? If you are still alive then you need to eat, drink, use the gas/elec/water etc. but aren't contributing to the income other than maybe £90 odd a week incapacity benefit.

As has been said, life insurance is life insurance and much of a muchness. My insurance is with Scottish Provident although i don't particularly rate them from a service point of view (I chose them for other, health related, reasons).

Basically, I agree with everything ACG has said!

magpiecottage

If you are taking out a term assurance, consider having it in trust. This means you cannot benefit from the death benefit but then you will not have much use for the money if it ever pays out.

On the other hand, the insurance company can then pay out without waiting for probate to be sorted out (it may also save Inheritance Tax).

On the subject of probate, you have made a will, haven't you?

jonny2510

Thanks for the advice everyone, I'll certainly give the PHI some thought.

With regards to the waiver of premium - I note that it is not fixed / guaranteed like the premiums themselves.

Should the waiver costs rocket, does anyone know if I'd be able to cancel the labour part of the policy without cancelling the policy itself?

weighty1_2

jonny2510 wrote: »

Thanks for the advice everyone, I'll certainly give the PHI some thought.

With regards to the waiver of premium - I note that it is not fixed / guaranteed like the premiums themselves.

Should the waiver costs rocket, does anyone know if I'd be able to cancel the labour part of the policy without cancelling the policy itself?

Are you sure the waiver premium is not guaranteed? I've just run a quote via one of my adviser sourcing tools and when waiver was included the illustration does not mention that it is reviewable.

There is generic wording to the effect of:
Where you have chosen reviewable premium rates on any of the benefits shown below, we will review the premium for each of these benefits on the first policy anniversary date on or after they have been in force for five years.
However, this is always shown on the quote irrespective of whether guaranteed or reviewable premiums have been chosen.

The Scot Prov plan is pretty flexible and if you really wanted to I'm sure you could have the waiver removed, however, I think it is unlikely that the cost would increase signficantly

jonny2510

weighty1 wrote: »

Are you sure the waiver premium is not guaranteed?

The personal illustration says

Total initial gross monthly premium for your plan £xx.xx
The total includes: £0.20 for premium payment benefit (sickness, accident or disability)

Where you have chosen reviewable premium rates on any of the benefits shown below, we will review the premium for each of these benefits on the first policy anniversary date on or after they have been in force for five years. Reviews will be carried out at regular intervals thereafter. For Unemployment benefit (including Premium payment benefit (unemployment)) reviews will be carried out more frequently.

unless I'm reading it wrong, and the bold only applies if I've chosen reviewable benefits??? The premium rate on the personal illustration does say 'guaranteed'.

The key features document says that is is provided by some other insurance company (UK General Insurance Ltd), and so would be subject to change

Though I initially wasn't going to go for it (I assumed it would cost more) I'm happy to pay 20p p/m for it. Maybe I'm just splitting hairs. I was just a bit concerned about the premiums raising significantly when I'm 10 years older, and needing to cancel the entire policy as a result (which in turn would lose my guaranteed rates today meaning a more expensive policy - if that makes sense!)

kingstreet

To get Premium Payment Benefit (Unemployment) you have to be applying for unemployment cover? Are you?

Otherwise you're taking Premium Payment Benefit (accident, sickness or disability) to go with life, critical illness and or disability income benefit.

ACG

Total initial gross monthly premium for your plan £xx.xx
The total includes: £0.20 for premium payment benefit (sickness, accident or disability)

Where you have chosen reviewable premium rates on any of the benefits shown below, we will review the premium for each of these benefits on the first policy anniversary date on or after they have been in force for five years. Reviews will be carried out at regular intervals thereafter. For Unemployment benefit (including Premium payment benefit (unemployment)) reviews will be carried out more frequently.

It will cost 20p, this should be guaranteed.

The next bit then says "WHERE you have chosen" if you havnt chosen other bits then you dont need to worry about it being reviewable or not.

jonny2510

kingstreet wrote: »

To get Premium Payment Benefit (Unemployment) you have to be applying for unemployment cover? Are you?

Otherwise you're taking Premium Payment Benefit (accident, sickness or disability) to go with life, critical illness and or disability income benefit.

Ahh, my mistake, it's just the Premium Payment Benefit (accident, sickness or disability) that I'm looking to get. I must have gotten muxed ip!

Thanks for all the input everyone. I'm just trying to do some appropriate due-diligence before applying.