I'm so confused... Should I get MPPI?

ACG

PHI = permanent health insurance. Basically income protection until you retire in this case by the sounds of it.

I will earn nothing from this, so im hopefully as independent as they come... i would take out income protection if you would be up a creek without a paddle should you be unable to work.

You dont need to be independent to see there is a need for it.

But dont be pushed into something you cant afford, its pointless cancelling it in 6-12 months time. If cost is an issue you can have a split deferred policy, say £1000 a month after 3 months and then the remainder after 6 months?

jowie

ACG wrote: »

PHI = permanent health insurance. Basically income protection until you retire in this case by the sounds of it.

Okay... So different name, same thing. Got it

I will earn nothing from this, so im hopefully as independent as they come... i would take out income protection if you would be up a creek without a paddle should you be unable to work.

You dont need to be independent to see there is a need for it.

Absolutely. And thanks for the free advice to everyone here. Makes me feel a bit more confident about what she said.

But dont be pushed into something you cant afford, its pointless cancelling it in 6-12 months time. If cost is an issue you can have a split deferred policy, say £1000 a month after 3 months and then the remainder after 6 months?

I should be able to afford it, but I wasn't expecting it to be quite so high. But if £110 a month is okay for both a Life policy and PHI (with 13 weeks deferment) then I will be happy to pay it.

Annisele

Cost depends very much on your circumstances.

If you're 18, in perfect health, all your relatives were in perfect health until they were knocked over by buses aged 110, and you're insuring income of £1k a month, it'll be relatively cheap.

If you're overweight with a history of heart attacks, all your family members died of inherited diseases before they were 25, and you're insuring income of £10,000 a month, it'll be *pricey*.

jowie

Annisele wrote: »

Cost depends very much on your circumstances.

I'm 39, in perfect health, all my relatives are in perfect health and I'm insuring my income for about £1,850.

How does the price sound now?

dunstonh

At 39, you are of the age when things like PHI, critical illness and life cover start to go up up in price quite a lot as, to put it bluntly, you are entering the age where claims are more likely.

jowie

dunstonh wrote: »

At 39, you are of the age when things like PHI, critical illness and life cover start to go up up in price quite a lot as, to put it bluntly, you are entering the age where claims are more likely.

Yeah, I wondered as much. It probably means that the policies are just going to get more and more expensive. I've been discussing this now with a few different people (friends and family), and have decided I'm not going to take it out. I would rather put the money into paying off my mortgage a bit quicker. I'll just stick with the Life Policy on its own.

Thanks for everybody's advice. :beer:

ACG

You do realise your more likely to claim on the Income Protection than you are on the life insurance... is your decision based on price alone? Why not go back with a budget?

I keep banging on about a client i have, he refused cover last year. This year he had a heart attack... hes too ill to go back to work properly but cant afford to not work. Ive spoken to him a couple of times this year and i wouldnt wish his situation on anyone.

Paying an extra £70 off your mortgage a month less than £850.

jowie

ACG wrote: »

You do realise your more likely to claim on the Income Protection than you are on the life insurance... is your decision based on price alone? Why not go back with a budget?

I've just been hearing stories about issues with small-print, how they won't pay out if they can find any way of not paying out... Even a financial advisor who doesn't have any insurance... He doesn't even believe in the products he is selling! I know of nobody else who has this type of cover. I've never had it before, so I feel I was suckered into it somewhat.

Won't your client get his mortgage put on interest only while he is ill?

ACG

Try getting an Interest only mortgage now a days... no chance.

http://www.lv.com/income-protection/useful-information/claims-paid
http://www.friendslife.com/media/news/03-May-2013-Friends-Life-discloses-income-protection-claims-figures-and-calls-for-consensus-on-disclosure.jsp
http://www.moneymarketing.co.uk/protection/scottish-widows-publishes-income-protection-stats-for-first-time/1072021.article

They pay out 80-90% of claims.

You only ever hear about the negative stories but in reality they pay out more often than not. I used to work for a life office and we received a claim for life insurance.... for a broken arm! Stupid claims dont help the statistics.

How anyone cant believe in income protection is beyond me.
Do you insure your contents?
Do you insure your pet?
Do you insure your boiler?
Dental insurance?
The one thing that pays for all of those insurance policies and the things they protect, on top of your mortgage, food, holidays is your income.

A financial advisor who doesnt believe in income protection is disgraceful. If he said mppi (which is the original policy you mentioned) i could understand to some extent.

I wont say anymore on it as i feel like im being one of those pressuring sales people which i would never do with actual clients but there is a need.

dunstonh

I've just been hearing stories about issues with small-print, how they won't pay out if they can find any way of not paying out..

Is this from people who know what they are talking about or are they just Daily Mail readers? Critical illness cover, for example, has claim payout rates around the 95% mark. Income protection is around the 80-90% mark The ones not paid out tend to be claims where not covered or non-disclosure. The media tends to pick on the 1.5% non disclosure cases and twist it enormously. There was one last year where they made out the insurer was bad for not paying out but the person didnt disclose medical facts. The media edited the insurance company statement (full one was on their website so you could compare what the media chose to display). The media failed to mention all the things the individual failed to disclose. All of which was important information you just dont forget.

Even a financial advisor who doesn't have any insurance... He doesn't even believe in the products he is selling!

He shouldnt be a financial adviser then. Perhaps he isnt a very good one. I have been doing this over 20 years and I have seen enough cases where people have claimed and are so grateful and others who chose not to have it and have suffered because of it. Including losing their house and in one case their marriage. Are you sure he is referring to PHI type income protection? If he was referring to PPI type income protection then I could understand that. I dont rate that much either If he is an FA and not an IFA then his employer may not offer a PHI type income protection. Most FAs do not have a PHI available. The banks in more recent years tended to offer only a budget PHI policy which tended to be quite poor. I wouldnt rate those policies much either. I would prefer the more comprehensive PHI policies. So, it could be that this FA doesnt know enough to say because he isnt aware of what is available and/or that his only limited product range is not very good (which is always a risk when using an FA and not an IFA).

I know a financial adviser who got paid out on a CI policy last year and is still receiving him income protection claim each month. He keeps reminding me to increase my coverage just in case.

I know of nobody else who has this type of cover. I've never had it before, so I feel I was suckered into it somewhat.

I would say most people dont have it if you look at pure numbers. You may even find more people insure their mobile phone as they consider that important. Yet they dont find insuring their income important. Priorities all wrong.