Short or Long Term Income Protection

kasperblue

I've had income protection for 4 years since I became a first time buyer (i'm 30). I've had my renewal notice and i'm considering the best route forward and was wondering what everyone else does?

I'm in good health (touch wood), dont smoke and have an income of £37k. I dont want to spend a fortune on income protection but I do like the idea of it in some form - and i've already been paying a £15pcm premium so i'm used to it going out. I have a partner, so technically it wouldnt be the end of the world if my income stopped i.e. not all bills depend on my wage.

BUT - do i get a really good £2000pcm protection for 12 months, or a £500-600 pcm long term plan until retirement. They're both about the same cost and i'm completely torn. Do I hope/presume that a 12 month cover wuld be enough to see me through most problems with plenty of money or do i hedge my bets and go for much less income but forever!!!

Anyone else made this choice or got any thoughts on the best route? I know its personal, but i'm completely on the fence!!!

Thanks

dunstonh

do i get a really good £2000pcm protection for 12 months,

Is there such a thing?

or a £500-600 pcm long term plan until retirement.

Underwritten at point of sale, much more likely to pay out than a PPI.

Given the choice of PPI or a PHI I would take PHI every time.

weighty1_2

Liverpool Victoria produce claims statistics for their long term income protection plans. The average length of a claim in around 7-years. Will you still think the "really good" £2,000/month policy is that great 6-years after it has stopped paying out and you are relying on solely on state benefits?

Also, you say that it "wouldn't be the end of the world" if your income stopped. So, what are you going to give up? Your car, Sky TV, nights out, new clothes??? Unless you could save the vast majority of your income your lifestyle is going to suffer substantially after 12-months.

Personally, as you can probably tell from the above, I'd always go long term!

InsideInsurance

One of the key differences between the two however of cause is that PPI/ASU covers unemployment which I certainly would imagine is more likely to be a claim of less than 12 months -v- a health related issue.

Personally I would go for PHI as well, certainly shop around if you are receiving any type of loading as the quotes I got ranged massively.