non verified income protection insurance policy

jabba21

Hi,

One for the insurance gurus here!

I currently have income protection to the maximum allowable (65% or thereabouts) of my annual net income (32k). As a self employed (sole trader) I have just taken out a PCP for a work vehicle (£875 pcm over 5 years) and have been looking into a way of covering this payment. I have been offered a suite of three policies (to replace my current income protection) that add up to my personal income requirements PLUS the vehicle payment (£875 & £1000 & £650pcm). I have been told these will payout these amounts in the event of a claim (for serious illness or incapacity). Life cover is separate.

These three separate policies are offered as "non verified income protection insurance policies", which means that in the event of a claim they do not contact other insurers with a view to only paying their "share"of the payout. This seems to be a crafty workaround of the rules designed to prevent people from "over insuring" their income. The company offering these policies is FCA regulated and authorised, so i have to assume this legitimate, but should i be aware of any pitfalls apart from the usual "understand what IS and is NOT covered" questions.

Many thanks in advance.

Nearlyold

How long do these new policies pay out for, is it short term or long term? Your current policy sounds like PHI which pays a long term income.

ACG

Why not just take out (the dreaded) PPI policy for your car?
Keep your income protection as is.

I used to work for Friends Provident (which is now part of aviva), I have never come across the phrase "non verified income protection" before. That is not to say they do not exist, but I would be surprised there are 3 companies who guarantee not to do any checks. You may have to sign some sort of disclaimer at point of claim, which could make you liable down the line for any overpayments.

jabba21

ACG -

I have hunted high and low and nobody offers the "dreaded" PPI for obvious reasons. The adverts for PPI always link you to firms offering income protection.

The advisor said that because I am self employed and the sums insured are relatively small no proof of income is required. As a backup i have asked them to spell out in writing in crystal clear terms that all is as I expect.

Nearlyold -

The current (outgoing) income protection policy only pays out 65% of my approx 32k net income for ONE year after the deferment period.

The 2 "new" income protection policies (combined) payout approx 80% of my net income for TWO years after the deferment period.

The 3rd "new" policy pays out the full monthly cost of my vehicle PCP for it's FIVE years duration. (It's a 58k electric taxi in case you were wondering).

I am also taking out a simple life cover policy as well.

Thanks for your replies folks - enjoy the weekend.