Health Insurance or Income Protection?

edited 13 August 2018 at 12:09PM in Insurance & Life Assurance
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Cottage_EconomyCottage_Economy Forumite
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edited 13 August 2018 at 12:09PM in Insurance & Life Assurance
I currently pay £77 a month for a Vitality Life Policy through my employer. Pretty much all singing and dancing with a 2 yr Moratorium clause. Never had a medical. I'm 45, no pre-existing conditions and, as of a couple of months ago, now taking HRT. Never claimed.

When I started 3 years ago the plan was less than £50 a month, but has now crept up to £77, including a massive 20/25% hike last year as I would be turning 45 in the coming year.

As money is always a bit tight, I've done nothing that required me to spend money, so all my exercise is free - no gyms, fitness trackers, etc. The area is lovely and quiet and has great areas for running/walking. I do free weights and yoga at home.

I work from home in the country and get no rewards of note - everything is so far away I have to drive silly distances to claim anything. Several miles drive for a 'free' starbucks or 50 minutes to a cinema when the local community cinema is 7 minutes away and cheaper, even taking into account the 'free' cinema ticket. The closest participating gym is half an hour drive and costs £55 a month. Some other discounts are only available at higher levels of engagement, so really I'm paying for it.

Bottom line is, I get no rewards of any use to me.

An email has come out from my firm stating that next year they will introduce an annual policy excess of £250 for bronze level and £100 for silver level to 'encourage' engagement to higher scheme levels. So if I claim, I pay the excess. If I don't want to pay the excess, I must spend the money and engage fully with the scheme to get to gold level.

At the same time an email came out reiterating the sick policy, 10 days full pay and 10 days half pay.

I feel like I've been half asleep and these two emails have jerked me awake. If I get sick for any length of time I'll still be out of pocket, regardless of the health insurance.

I would be better off with an income protection policy wouldn't I? I actually feel really stupid for not seeing it before. I can't pay for both so have to pick one.


  • csgohan4csgohan4 Forumite
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    Income protection policy you have more say, you can link it to inflation and therefore your premiums and payment will rise or you can freeze it and just pay you a fixed amount with fixed premiums.

    unfortunately PHI will always increase every year, due to age +/- new conditions, which is why I decided against it. I pumped those extra premiums into income protection to get the max amount I can get

    Ideally if you can afford it get both, but it is not unheard of to reach over 100 a month for premiums once you hit 50 + which is silly imho
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

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  • edited 14 August 2018 at 10:43AM
    Cottage_EconomyCottage_Economy Forumite
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    edited 14 August 2018 at 10:43AM
    I went across to an online broker to get some quotes for accident and sickness cover.

    Level guaranteed premiums until I am 65 with a deferred period of 13 weeks for 60% of my income is £42.42.

    I chose 13 weeks to make the policy a little more affordable despite the gap between it and the end of my sick pay, as I have savings to cover that gap if necessary.

    Looked at having a bolt on unemployment policy and that came in at about £38 for 12 months of benefit and 8 week deferment, but I have to phone and play around with that one. I only want six months benefit and a 13 week deferment period. My savings will keep me going for at least three months if I'm unemployed, then the policy will kick in for six months. I'm confident I can find a job with nine months. If I'm made redundant and get a package, I can extend that.
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