Income Protection...Change Jobs

OMAR

Hi,


I am thinking of taking this out and have a couple of questions....


- What happens if I decide to change jobs once the policy is in force, and say my income has dropped slightly to what it was when I originally took the policy out?


- If I get full company sick pay for 6 months....is it worth deferring for 6 months OR could I get two lots of payment for the first 6 months if I don't defer?


- If I do defer, does that mean I get 6 months company sick pay, and 12 months of the Income Protection Pay or do I just 6 months of Income Protection Pay as I deferred?


Thanks,


- Also, If anyone knows of any good competitive websites....much appreciated.


Omar

jonesMUFCforever

You should periodically review all insurances that you hold.
If you don't you might pay for something you don't need or worse not have enough cover.

kingstreet

Assuming you are talking about permanent health insurance - proper income protection and not short-term accident & sickness cover.

1. There may be a duty of disclosure for you to declare any change in occupation. Any benefit will be based on your income at the time of claim

2. You should match the deferred period for your PHI with your employer sickness benefits. Any continued employer payments will see your benefit reduced, possibly to nil until such payments end

3. You'll get six months from work, which will be continued salary and subject to income tax and NI, then your PHI benefit will commence and this is tax and NI free. This will be paid until you are fit enough to return to work, or the end of the policy term you chose, whichever is sooner.

Make sure you pick "own occupation" cover to increase your chances of a payout, as this will be based on your inability to perform the essential duties of your job and not your inability to hold a pen, use a keyboard etc.

This is not a product well purchased online, as it is less about cost and more about ability to claim. Seek independent financial advice to get the right cover at the right price.

OMAR

Thanks for that, I have been to a few websites that quote the British Friendly and even Legal and General.


I am looking for around a 1k-1.5k benefit


anyone know of the best places.....?

OMAR

I actually get 6 months company sick full and 6 months company sick half.....so does this mean I need a 52 week deferral or can I stick with 6 months?

kingstreet

Your second six months will be half pay, less tax and NI, while your PHI benefit can be higher., as it is tax free.

If it is, the benefit will be scaled back for that period, so you only get the £ benefit amount, but made up from your employer payments and reduced benefit payment.

Chances are, if you are gong for less than maximum benefit, you'll be better off with twelve months deferred period for the above reason.

Don't forget though, if you think you may change jobs, it may be more sensible to base your planning on what is your likely sickness benefit then, rather than now.

OMAR

ahh thanks for that....


Ideally then, a PHI of £1k to £1.5k, deferred for 12 months which will cover sickness and accident.


Can I base the cover on my future career change, as I will be applying for a policy it over the next few weeks...or do I base it on my current job and tell them about the change later? Confused about that really...


Also, what about having a separate unemployment (redundancy/loss of job) cover for 12 months. That means I am covered for all 3 of sickness/accident/unemployment? Is this allowed?

InsideInsurance

You can pay for separate unemployment cover, alternatively a couple of PHI providers do offer it as an add on to their own policies (though it is still a Max 12 product unlike the PHI itself)