Income Protection v's MPPI

fluidthinking

My wife and I currently have no life assurance or income protection of any kind and I am trying to get this sorted out (with a lot of help from this site!). Having done some research I am leaning towards a life assurance policy and then a separate income protection policy.

I am happy with the Life Assurance quotations and I have used the Cavendish Online site (with the one-off fee rather than commission).

When it comes to Income Protection Insurance (covering accident, sickness, unemployment) I am getting a little confused and was wondering if anyone had any help for my questions:

1) Does Income Protection Insurance differ from Mortgage Payment Protection Insurance and if so then how?

2) Does Income Protection Insurance usually only pay out for 1 year (like Mortgage Payment Protection Insurance)?

3) Is there a broker with the one-off fee arrangement for Income Protection Insurance?

Many thanks in advance

dunstonh

1) Does Income Protection Insurance differ from Mortgage Payment Protection Insurance and if so then how?

PHI is underwritten to your circumstances, cannot be cancelled by the insurer and generally has much better coverage when it comes to not being able to work.

MPPI or general insurance income protection is lower quality.

2) Does Income Protection Insurance usually only pay out for 1 year (like Mortgage Payment Protection Insurance)?

General insurance income protection may only pay out for a year or two but most PHI policies will pay until retirement (assuming you put 65-68 as your finishing age).

3) Is there a broker with the one-off fee arrangement for Income Protection Insurance?

Unlikely on the online discount front as PHI has very poor internet coverage. With three levels of cover, low profitability and a big difference in cover between providers, plus some plans falling under investment (full) authorisation and some falling under protection authorisation, the full authorisation plans wont appear on protection only websites.

fluidthinking

Thanks for the response, very detailed.

Please excuse my ignorance but what does PHI stand for?

dunstonh

PHI = permanent health insurance.

That is the correct name for traditional income protection. Nowadays you have so many plans using the term income protection for marketing reasons its hard to know which ones are the proper PHI plans and which ones are the low budget general insurance plans. PHI policies do then to make the point that they are permanent health insurance plans though.

fluidthinking

Excellent, thanks for all your help!