Income Protection & Life Assurance

lollyc_2

Hi

Can anyone help?

I was looking at the PPI rates that come with a loan (that i've not yet taken out) and thought that there must be a better/cheaper way to cover my outgoings should I fall ill/be made redundant.

I then thought that there must be some insurance I can take out to cover all my monthly repayments (credit card, loan, mortgage) if I fall ill and am unable to work, or if I am made redundant, plus having cover for Life too. I would like to see if this would work out cheaper than individual cover for PPI on loans/credit cards?

Please can anyone direct me to where I can find out more information about Income Protection Policies? I would like to combine this with a Life Assurance policy (if this is my best/cheapest option) to cover me for unemployment, critical illness and death, so I can rest assured that there will be enough to cover the monthly payments (or total repayment if I die). I already have Life Assurance for my mortgage, but it only covers the value of the mortgage, and not other credit card borrowing.

thanks
Lollyc

p.s. Sorry if I have muddled up my terminology, I have only just started looking into this! Better late than never though!

silverfoxuk

I'd suggest a couple of options depending on how much time you have on your hands.

If you want to do things yourself it's a case of visiting various websites/forums like this one, moneyfacts.co.uk, cavendish, lifesearch, h-l etc etc to ask questions, get quotes etc etc. After a few weeks you should feel knowledgeable & confident enough to make a decision. I've been doing this myself for the last few weeks and rapidly coming to the conclusion that it would take me too long to build up the expertise to be confident of picking a suitable product, never mind the best one on the market.

If you aint got a whole lot of time, you could visit an IFA. The additional benefit of visiting an IFA is that they are regulated. The benefit is that you have some comeback, including via the Financial Ombusdsman, if you are sold an 'unsuitable' policy. Have a look here to see the types of things the Financial Ombudsman looks at: http://www.financial-ombudsman.org.uk/publications/ombudsman-news/61/61-insurance.htm An IFA whose been doing the job for a while should also be aware of those companies with good claims/customer service and those who are a pain to deal with.

The risk of going it alone is that you buy an unsuitable product for your needs. Remember every insurance policy comes with tems and conditions, exclusion etc. Here's an example - if you visit legal & general's website, they'll sell you their 'Family Life Insurance Plan' online at a fairly competitive rate. Check the small print of the 'key features' policy (available online) and you'll find that it won't pay you a penny if you die in the first 5 years of the policy due to 'any illness, injury or condition which you already knew about before this policy started'. That's quite a wide ranging exclusion in my book. Having said that, their product could be ideal for you, it's DYOR (Do Your Own Research) or use an IFA.

bdk

use https://www.antinsurance.co.uk its a payment protection insurance so set the amount you want insured per month, it covers the usual accident illness and unemployment

dunstonh

Its only an accident sickness and unemployment plan though and not proper income protection. Make sure it matches your needs.

lollyc_2

Thanks for your advice so far

-- whats "proper" income protection?

Lollyc

dunstonh

permanent health insurance is "proper" income protection. It comes above ASU plans in the pecking order of needs.

lisyloo

permanent health insurance is "proper" income protection

But (just for the sake of clarity) it doesn't cover you for unemployment.
It's just being unable to work for health reasons.

Out of interest why does it come above.
Is it because it covers more (income rather than payments?) or for longer (until retirement rather than certain period?).

I would be interested to know. Thanks

Coops10

Accident, Sickness policies normally cover mortgage payments (plus a little more for bills if required), generally for a period of 1 or 2 years and then cease.

PHI policies can cover you until you either die, retire or return to meaningful employment. Some policies have been known to pay out for a very long time. Far more worthwhile.

lisyloo

Some policies have been known to pay out for a very long time. Far more worthwhile.

I agree. It has always seemed more worthwhile to me to protect your income from which you can then meet ALL your requirements rather than protect individual bills.

(I'm aware you can't get 100% of your income from PHI).