Income Protection

ccdorset

Hello,

I'm not sure if I'm posting in the best forum for this, or whether the Mortgages section might be better.

However, I'm a First Time Buyer and am purchasing my first home through Connells. I have completed my mortgage application with the estate agent's mortgage advisor, but he has also sold me Life Insurance, Contents Insurance and Income Protection.

My mortgage payment is £381 per month, but the Income Protection alone is £53 per month. Contents is £12 per month and Life Insurance £10. I realise the Income Protection premium is high as it is covering my income and not just the mortgage payment itself. But I'm wondering if Mortgage Protection would be better. Another concern is that the advisor only uses Friends Life, so this was the only option available to me.

Any advise you could give would be greatly appreciated!

Thanks

David

alchemist.1

Advice would be to cancel it and go to someone who researches the whole of the market rather than just Friend's Life.

Have you checked whether they look at whole of market mortgages providers aswell or just their own selection? Could make a huge difference to what you will be paying.

This is the problem with using a Estate Agent broker. They are not independent.

ACG

With income protection, it is a stand alone product. You can cover your income, or you can have an amount to cover your mortgage, anything in between or even below.

As an example, I cover myself for an amount which would mean if I could not work, I know my mortgage and bills would be cleared. It helped to keep the premium down at a time when I was taking out a much larger mortgage.

On a side note, my policy is with Friends Life, the reason for that is includes Best Doctors (do not underestimate the value of that), I also paid for the top up of Best Doctors Global treatment.

I THINK Connells make you sign a document that says if you cancel a policy during its clawback period, you agree to pay any commission clawedback (but I could be wrong). So be careful what you do before you cancel it. If the policy is too expensive, speak to the broker and tell them.

tacpot12

Mortgage protection only covers your death. Unless you want to lose your home and live on anything other than benefits, you need income protection.

Try to replace the current cover with better value cover, and cancel the expensive cover only when the new cover is in place.

ccdorset

Thanks for all your replies.

Unfortunately I was a bit naïve and didn't realise the Mortgage Advisor in Connells wasn't independent and wouldn't be searching the whole of market.

The advisor did mention the Best Doctors policy with Friends Life, which did sound good. I'm just concerned at the overall cost of it all.

The income protection only covers me if I'm off work due to accident or sickness, whereas Mortgage Protection could also include Unemployment - but I realise this would be designed to cover the mortgage only.

Decisions decisions!

Thanks

NinaSwiss

Not surprised income protection is expensive considering what is covered but I imagine it also depends on the specifics of your cover.

My cover is about £55 per month (direct from Legal & General):

• Payout is about £2100 per month - enough to cover mortgage , bills, a holiday or 2 and rainy day saving.
• Cover is till retirement (started at 32 years of age).
• I can only claim from end of three months. This keeps the cost low as I do have at least 3 months rainy day funds.
• Same occupation
• Rises with inflation (both premium and payout)

I am single with no dependants or people I can financially depend on so made sense to get income protection.

ACG

The broker should have given you a document that advises if they are whole of market/tied/multi-tied. This is why you should read documents, I give documents to clients in advance, I then ask if they have read it and very few have so I go through it with the if I meet up with them.

You could find that Connells have "loaded premiums" which means they earn more money for the same cover. You could try and cancel/complain but speak to them about it before cancelling incase you have signed to say you will pay them ther commission if cancelled.

csgohan4

ACG wrote: »

With income protection, it is a stand alone product. You can cover your income, or you can have an amount to cover your mortgage, anything in between or even below.

As an example, I cover myself for an amount which would mean if I could not work, I know my mortgage and bills would be cleared. It helped to keep the premium down at a time when I was taking out a much larger mortgage.

On a side note, my policy is with Friends Life, the reason for that is includes Best Doctors (do not underestimate the value of that), I also paid for the top up of Best Doctors Global treatment.

I THINK Connells make you sign a document that says if you cancel a policy during its clawback period, you agree to pay any commission clawedback (but I could be wrong). So be careful what you do before you cancel it. If the policy is too expensive, speak to the broker and tell them.

Thanks for this, I incidentally have income protection with Aviva and wasn't aware of this programme, I am now looking into it and probably going to add it on.


Is it only limited to overseas treatment or can you can posted at home in London for example?


Interestingly the Aviva website don't advertise this in their income protection, but is in their policy booklet

Weighty1

csgohan4 wrote: »

Thanks for this, I incidentally have income protection with Aviva and wasn't aware of this programme, I am now looking into it and probably going to add it on.


Is it only limited to overseas treatment or can you can posted at home in London for example?


Interestingly the Aviva website don't advertise this in their income protection, but is in their policy booklet

This only started being offered on Aviva products once the merger with Friends Life completed.
In regards to the Global Treatment, you are provided details of the top specialists in the world for the related condition and then it's the policyholders choice as to which specialist they see. If they are based in the UK then you could see them.

ACG

csgohan4 wrote: »

Thanks for this, I incidentally have income protection with Aviva and wasn't aware of this programme, I am now looking into it and probably going to add it on.


Is it only limited to overseas treatment or can you can posted at home in London for example?


Interestingly the Aviva website don't advertise this in their income protection, but is in their policy booklet

https://www.aviva.co.uk/adviser/product-literature/files/al/al99070c.pdf

There is Best Doctors which is "just" a second opinion on diagnosis and treatment.
Then there is Best Doctors Global Treatment which you pay for and includes the above, plus the bits in the pdf above.

For me, it is the best £4 a month anyone will spend.

ccdorset

Best Doctors Global Treatment does sound like a worthwhile add on, so I think I am going to consider keeping the policy with Friends Life and adding that on.

I think perhaps when I come to remortgage again in a couple of years time I will review all the options!