income protection

Maureen64

i am employed full time and looking for income protection, however i am also a director of a limited company (as an officer not as an employee) the company is in very early stages and i wont be taking a wage, only dividends, once established and making profit.. do i need to tell the insurance company when taking out the policy, and will the fact that i am a director have pitfall when trying to organise a policy, or even at the later stage if a claim is made ?

dunstonh

If you are referring to proper income protection (as in permanent health insurance) then the fact you are a director is irrelevant.

If you are talking about the budget PPI version where some of them call themselves income protection (when they are not really), then it can have a significant impact.

Maureen64

thank you for your reply. i was refering to income protection against sickness, accident or redundancy, to cover the earnings from my employment for a short period. do the proper income protection policies cover all 3 meantioned here or just sickness and accidents ? and is it better to speak with larger insurance companies.

Weighty1

In relation to A,S,U policies the ability to claim for unemployment is very stringent and only normally applies to if the company is involuntarily liquidated. Many ASU providers don't allow dividends to be taken into account either so that's another hurdle to cross.

Long term income protection plans (PHI type cover) does not cover redundancy, only ill-health/accidents.

dunstonh

i was refering to income protection against sickness, accident or redundancy,

That is PPI - payment protection - rather than income protection. As weighty says above, it will have quite strong limitations, possibly exclusions even, on shareholding directors.

do the proper income protection policies cover all 3 meantioned here or just sickness and accidents ?

No. Just inability to work through illness, accident or medically related issues. However, they do not stop after 12 months.

and is it better to speak with larger insurance companies.

It is rarely a good idea to deal direct with the insurer or their agents. Prices tend to be higher via that method and you are limiting yourself to that one insurer who probably wont be the best one available.