Where to go for PHI mortgage protection, and some important questions.

evosy1978

I'm 35 and self employed. We have just moved into our first house. I remember from a years ago being advised to take out PHI instead of MPPI? Does this still stand? Martins article says MPPI now covers self employed.

My partner is PAYE part time. We have 2 young kids.

Would we need 2 different policies? PHI and MPPI for her?

Thanks for any advice.

ACG

MPPI is a short term fix - ie it pays out for illness accident and possibly unemployment for between 12-24 months.

PHI is a more long term plan, if you could not work until you were 65 (assuming thats the end date you put) it will pay you your income for 30 years - but it does not cover unemployment.

MPPI is fine if your coming towards the end of your mortgage/working life etc but to me, its not for someone who still has a long time left knowing they have bills to pay.

Im a MASSIVE fan (as much as you can be without being sad) of PHI. Its the first thing i look at - ahead of life cover etc as your more likely to claim on it. I also read some stats somewhere the average claim is around 6-7 years.

Either plan could be fine for both of you - although the unemployment part is unlikely to be any use for yourself as it usually states involuntary unemployment... the only way that is likely to happen is if your business is declared insolvent.

kingstreet

There are a few "menu" plans in the market where you can add unemployment cover to permanent health insurance, life cover and critical illness cover.

I suggest you get advice from an IFA on the best options available to you.

evosy1978

We both have life assurance already.

So your saying a joint policy with a PHI plan?

Thanks

kingstreet

Each plan you have has a policy fee.

A menu plan allows you to combine different benefits into one plan and pay only one policy fee.

Sometimes this results in a lower overall premium, sometimes separate plans offer better value.

However, the menu plans from;-

Friends Life
Scottish Provident
Bright Grey

and one or two others, score a four or five star rating from Defaqto for the quality of their plans and charge only one policy fee, which can result in improved value.

If you are buying on quality, as well as price, it's the kind of thing brokers take into account when recommending.

ACG

PHI can only be done on an individual basis. However some providers have a "menu" where you can pick and choose what you want (PHI, Life, Critical illness, Combined life & CI) it can sometimes work out cheaper to do a combination with the same company.

dunstonh

Martins article says MPPI now covers self employed.

MPPI has nearly always covered the self employed. It is one of the reasons successful MPPI complaints are in the minority compared to other types of PPI which see most complaints succeed.

PHI trumps MPPI with sickness coverage. However, it can be cost effective to have both MPPI and PHI. You have the MPPi to cover the first 12 months and have the PHI with a 12 month deferment which reduces it's cost. It kicks in when the MPPI ends.

evosy1978

Thanks.

So is there an online broker where I can input some figures and get an idea of prices? Does Cavendish do it?

dunstonh

PHI has very little internet coverage. The comparison sites tend to focus on the low admin, easy commission PPI/MPPI product. PHI is still largely paper based. Plus, PHI has more variations in coverage with different providers and some providers have multiple versions/options which dont make it suitable for sites focusing on price.

evosy1978

OMG Ive just looked on Drewbury!!!

1 year payment only, age banded and differed till after 4 weeks £25,
or full term benefit till 65, age banded and 4 weeks differed is £66.....

based on £1800 p/m

evosy1978

What kind of yearly increase are we talking for age banded payments?