not sure how it works

samuela66

Hi,
My b/f has just bought his first house and the Halifax called him the other day re: income protection and other insurances. He took out the income protection and is currently working with a temporary 6 month contract, I have said I dont' think he'd be able to claim against it if his conract doesn't get renewed, he hasnt received the policy yet, does anyone know the answer?????

Thanks

lisyloo

I'm almost certain he won't be covered.

These are usually for sickness, accident and redundancy.
So wont cover not obtaining a renewal.

I think he needs to look at these arefully as soon as they arrive to see if it's worthwhile for his situation.
There should be a cooling off period during which he can decide, however he will need to be careful to act within the dates.

If he wants to cancel the I suggest sending the letter by recorded delivery (65p).
That way he can prove it was received (signed for) if it mysteriously get "lost in the post".
Worth 65p in my view to cover yourself against the company trying to worm out of it.

lisyloo

Just a suggestion but what he could do is his own "self insurance".
i.e. open a seperate account and put some money by each month to cover all eventualities.
This way if he doesn't find work for whatever reason then he can draw money from this accounts.

pros are:

No-one taking a profit or admin costs.
He can pay out when he needs it which insurance companies sometimes don't

cons are:

If he has a large expensive (like not being able to work permanently) then he may not have enough savings to cover it.


An alternative is to go for a "hybrid" solution i.e. get some limited insurance to cover the cases hhe can't and do the self-insurance as well.

Just some ideas to consider.

I think insurance is a tricky area for contractors.
Even if he was sick he would have to prove what his income would have been otherwise which is clearly more difficult for someone with a fluctuating income than for a permanent employee.