Income Protection Help -

Pepperoni

Hi,

I'm trying to organise some Income Protection and could do with some guidance.

What are the benefits to getting a policy that only pays the benefit for 12 months compared to one that pays for the full term of the policy? The latter seems like the best choice to me but I feel I must be missing something?

Does anyone know the best place to compare such policies? Can easily find comparison sites for the 12 month option but not so much the full term benefit option....

Thanks

dunstonh

What are the benefits to getting a policy that only pays the benefit for 12 months compared to one that pays for the full term of the policy?

The ones that over cover upto 12 months are quite different to proper income protection. You may more commonly recognise them as PPI. PPI plans are not underwritten at the point of sale but checked at point of claim. The long-term income protection plans are known as PHI. Permanent health insurance. These are underwritten at point of sale and have none of the issues that PPI has. For some people, having a PPI and a PHI can be the best option but for most, having a PHI policy beats having just a PPI policy.

Does anyone know the best place to compare such policies?

Any local IFA or whole of market protection adviser. This is a product type that is mostly retailed via those. Comparison sites tend to favour PPI as its easier to sell and more profitable. Quite a lot of provider of PHI still go by paper applications and some of the best plans are not from insurers but from friendly societies.

Weighty1

The benefits of the short term payout options is that you can get them up and running in minutes and can still get cover if you suffer from a condition which would preclude you from arranging the full term options.

If you can get the long term cover I would always advise it. Claims on long term plan run for something like an average of 6.5-years so a plan which stops paying after 12-months would be of little use if you had even an average claim. If you have a life changing one then it supports the purchase of a long term plan even moreso.

You'll probably struggle to get a good comparison online. You'd be better off speaking to an IFA or a whole of market protection or mortgage broker and they should be able to assist.

stardust09

I got mine via this company, where you can compare lots of different quotes: https://www.drewberryinsurance.co.uk/income-protection-insurance. Their website also gives you lots of good advice about the different types of cover and their IFA's are very helpful and make sure you have occupation-only cover rather than general cover (something you need to watch out for as it's a sneaky way of making it harder for them to pay out if you need it).

Weighty1

stardust09 wrote: »

I got mine via this company, where you can compare lots of different quotes: https://www.drewberryinsurance.co.uk/income-protection-insurance. Their website also gives you lots of good advice about the different types of cover and their IFA's are very helpful and make sure you have occupation-only cover rather than general cover (something you need to watch out for as it's a sneaky way of making it harder for them to pay out if you need it).

"Own occupation" cover is something I've seen mentioned numerous times on this site and people warning others that they needs to ensure that their cover is arranged on an "own occupation" basis. The fact of it is that these days the vast majority of companies only offer own occupation plans or don't offer the cover at all. Some will offer a "suited" definition for some occupations but normally these are occupations which are deemed as higher risk, such as working offshore or manual workers, in which case you'd expect an adviser to recommend a provider who specialises in these types of occupations such as some of the Friendly Societies.