Income protection insurance

Kayteeheych

Hi,

First time posting on here so please be kind!

I have been offered a new job outside of the NHS having been an NHS employee for a long time. Unfortunately my new employer does not offer any occupational sick pay so I would only be entitled to statutory pay should I suffer any periods of sickness. As a well paid employee (net pay usually circa £2500) to be reduced to £92 per week really wouldn’t cut the mustard.

I don’t really want to take a gamble and not have anything in place in case I am off sick for a period of time. Just looking for advice regarding savings/ income protection insurance policies to weigh up my options.

Thanks!

dunstonh

Permanent Health insurance (PHI) is the main type of income protection. Mostly retailed via IFAs and whole of market protection advisers. It has very little coverage on comparison sites (who prefer to retail the PPI version).

You can broadly place PHI policies into three classifications of budget, standard and comprehensive. Although those terms are not actually used to describe them. The budget plans are often not worth the paper they are written on. It really depends on what you are willing to pay for the level of coverage you want.

ACG

The cost of a policy will depend on your age, health and occupation.
But you do not need to cover your full income, you can cover what you need.

I started a £15 a month policy a few years ago. It will not pay for me to go on holidays or take aways but it will keep a roof over my head. I should probably review it but theres always something more important to do.

System

Permanent Health Insurance is certainly an option and you may want to seek advice from an Independent Financial adviser on this. By it's very nature it is a long terms contract that can protect your income up to retirement age. This obviously comes at a cost.
An alternative to Permanent Health Insurance is Personal Accident and Sickness Insurance. You can tailor the benefits to meet your requirements but the policy will only pay out for a maximum period of two years from the start of any claim. The restriction in the length of any claim period is reflected in the cost of the policy when compare to PHI. You can read more about personal accident insurance on our website..
The choice is yours to make and depends very much on your assessment of what cover you actually need.

kidmugsy

This chap's good.
https://monevator.com/do-you-need-income-protection-insurance/

steakpie01

Generally speaking are there differences in the nature of the illnesses covered by short term income protection and long term protection, or is it safe to assume that the main difference is the duration of time a payment can be received for? I understand that different companies have different definitions of incapacity, but wondered if this extends to the different types of cover. I ask as I am trying to compare costs of having two policies. A short term protection for minor illness that would see me back at work within a yr and then defer payment on a long term policy for 52 weeks. I have just read L&G key fact of Income Protection Benefit. I thought it was a comprehensive policy and the one I was likely to buy, but, their definition of incapacity reads more like suffering significant disability and there is no mention of mental health issues. The example they give cover only the financial side of things and do not give illustrations of the types of illness that meet policy criteria. Any thoughts from some one that knows the policy would be helpful. The other policy I am about to consider is from Exeter income one plus?

Thanks

ACG

There are some companies (usually general insurance providers) who offer a cheap and not so cheerful policy.

Protection insurance companies do sometimes offer a limited payout policy (for 1-5 years) and those are the full policy usually with a cap on how long it will pay out for.