Income protection - Not sure whether to get it?

steampowered

I just did a quick search on moneysavingsupermarket, and got a quote of £13.10 per month for a policy with the same amount of cover.

This suggests that you would be vastly overpaying if you were to buy the policy being offered at £31.66 per month.

I suspect a big chunk of that is commission for the salesperson.

If you want to take out income protection insurance, you should do a comparison to ensure that you are getting a good price.

Silvertabby

Depending on length of service, he may be entitled to six months full pay, then six months half pay.

If so, you can then set the deferred period on the IP to 52 weeks which will drastically cut the cost. Posted by kingstreet

Plus second worse scenario (worst being death) would the policy pay out even if your partner was in receipt of a public sector enhanced ill health pension?

kingstreet

westernpromise wrote: »

I've had income protection policies in the past, against redundancy rather than sickness, and found two things. First, you can only buy them if it's clear you'll never need them. If you're in a line of work where you are likely to need the insurance you will generally find you can't get it. Second, what they pay out is usually so far short of what you need that you're still completely scr3wed even with the insurance. The last time I had one of these I had rent to find of £3400 a month, and the maximum payout I could find on any policy was £1500.

The policy you have sounds a bit expensive TBH. You'd be forking over £380 a year for a maximum payout of £6,000, which would be over 13 months so that if you recover it will be less. That means that unless more than one Billy Bunter in 16 makes a claim, the company makes money. I doubt the chances of a claim are really that high.

This is not accident, sickness and unemployment cover, it's permanent health insurance.

It is underwritten at point of sale, not at point of claim. Maximum benefit is usually 50% of gross annual income.

Benefit will be paid from end of deferred period to end of policy term/retirement as applicant chooses. Applicant is 31, so that's potentially £500 x 12 x 35 for a claim to age 67, a possible total payment of £210,000.

kingstreet

Silvertabby wrote: »

Plus second worse scenario (worst being death) would the policy pay out even if your partner was in receipt of a public sector enhanced ill health pension?

It would depend on the level of the pension, but I'd say probably not. The benefits should be reviewed regularly, taking into account employer benefits and how these change over time.

RedFraggle

For new starters in the civil service it is now 1 month paid sick leave per year of service up to 5 years then 5 months fullpay plus 5 months half.

Weighty1

steampowered wrote: »

I just did a quick search on moneysavingsupermarket, and got a quote of £13.10 per month for a policy with the same amount of cover.

This suggests that you would be vastly overpaying if you were to buy the policy being offered at £31.66 per month.

I suspect a big chunk of that is commission for the salesperson.

If you want to take out income protection insurance, you should do a comparison to ensure that you are getting a good price.

Are you sure that this is even for the same type of cover? I doubt it is.

pinklady21

Permanent Health Insurance is a godsend if you become incapacitated. As with most insurance, it is one of those things that you hope you never need, but are very glad to have if you do find you need it!

Slinky

pinklady21 wrote: »

As with most insurance, it is one of those things that you hope you never need, but are very glad to have if you do find you need it!

As my friend and her husband found out when she was diagnosed with a terminal illness aged less than 40 and with a young child.

(I'm not entirely sure what sort of insurance policy they had, but it's paid out and cleared the mortgage.)

At least my friend's husband won't have to worry about the roof over their head when the time comes and he will be spending more time caring for their child rather than earning money.

SuboJvR

Slinky wrote: »

As my friend and her husband found out when she was diagnosed with a terminal illness aged less than 40 and with a young child.

(I'm not entirely sure what sort of insurance policy they had, but it's paid out and cleared the mortgage.)

At least my friend's husband won't have to worry about the roof over their head when the time comes and he will be spending more time caring for their child rather than earning money.

This is something different again though - life insurance policies usually have a "terminal illness" clause that will pay when a person is diagnosed with illness anticipated <12 months to live.

steampowered

Weighty1 wrote: »

Are you sure that this is even for the same type of cover? I doubt it is.

No, I'm not sure. I tried to select the correct options and the correct policy based on what the Op posted but didn't spend much time on it.

My point is that the Op should do a proper comparison. There is no sense in buying the policy being flogged to them, if they can get the same policy for a fraction of the cost.

Similarly it is worth comparing this policy against other sickness and incapacity policies (given that the policy the Op is being sold would presumably only cover mortgage payments and not much else).