Income Protection is it worth it?

kizzyfur22

Hi,

I've been looking into getting income protection if I ever became ill or had an accident and need a bit of advise please as to whether it's worth having.

Firstly - will it cover me if I have 2 part time jobs? (I work 20 hours each week in both jobs and they are of similar nature - Reception/Office Work)

My employer sick pay scheme is crap - 1 week full pay, 3 weeks half pay at one job and just SSP at the other job. Hence Income Protection has been recommended to me, especially as I have a mortgage and bills to pay every month.

It seems complicated in the fact that companies might not necessarily pay out. I'm looking at the "Own Occupation" policy which I understand to be if you can't do your own job, however reading testimonials it might be that even though I can't do my job at my current employer I might be able to the same job at a different employers, irregardless of whether there is another job available!!

e.g. Say I injured my leg very severely and was on crutches for 5 months. I couldn't drive and walking upstairs proved very difficult. I was given very strong painkillers which basically knocked me out for most of the day. My doctor signed me off work sick for those 5 months. Would an insurer actually pay out because they might say I'm still capable of doing my job because I work in office and therefore spend a lot of time sitting down & could rest, even though I'm not mentally capable of working because of the painkillers??

I do have some money saved to cover me for 2 months but if I was off work sick long term then I would struggle. I have critical illness cover and life assurance.

Also what do they class as a pre existing medical condition?

Please help. So confused!!

weejonnie

It may be that a personal accident and sickness policy may be more suitable than a payment protection policy- I am saying that since if you lose one of your jobs you won;t be able to claim on the unemployment section of a protection policy because you won't be in receipt of JSA since you will still have the other one. There are several differences in the benefits.

If you want cover against long term sickness/ accident then you have to look at income protection/ permanent health insurance. These pay benefits until a specific age and once in force are non cancellable by the insurance company as long as premiums are paid.

However the costs (particularly for policies with a low excess period) can be quite substantial. One way of mitigating them is to do an personal accident/ sickness policy and then an income protection policy with a 52 week excess.

These policies, being non investment, are available from a local insurance broker - I suggest calling BIBA (they have a facility that puts you in contact with a broker specialising in that cover). http://www.biba.org.uk/ has full details.

ACG

I sell more income protection than i do life insurance - which for a mortgage advisor isnt the norm. The reason i sell more is i really believe in it.

Its the only policy i have. So thats my take on whether i think its worth having or not.

Own occupation is the best you can get - if you cant do your own occupation then they will pay out - ie they wont say (what the government do) "ok well you cant paint walls but you can put a headset on - therefore you can work in a call centre". If you cant do your job they will pay out.

Insurers are pretty happy to look at the situation as a whole. If your GP is putting you on painkillers that knock you out then your not in a position to work.

kizzyfur22

Thanks guys for the advice. I think Income Protection for Own Occupation is the one I'm looking at because it pays out in the long term (hopefully not that I'll need it) but I'll investigate in more detail. Unemployment cover is no use with me having 2 jobs and I know I can always do temp jobs.

I think I do need to speak to someone in more detail about it tho to get the best policy. Might try and sort out my pension at the same time.

InsideInsurance

Own occupation tends to be more expensive... unless you have some particular skills for your industry etc that are pushing up your pay beyond the normal office/ receptionist type thing then I would probably be less picky about it being own occupation. There arent many illnesses that are going to prevent office work but allow other types of work

Insurancehelp_2

It is best to speak to a financial adviser or a life insurance adviser. They can assess your personal needs and help find a suitable insurance policy for you. Income protection sounds like it would be beneficial to you. The alternative is accident, sickness and unemployment insurance, also known as lifestyle insurance. However this is a short-term protection product.

As for the pre-existing medical condition quetsion - Insurers will not accept a claim for a medical condition that began before the policy was taken out. They will take into account your medical history when you apply but will not pay out if you claim for something that happened prior to policy starting.

Hope this is helpful.