Income protection insurance

Luke_123

Hi everyone, I’ve tried searching but can’t find many results, to the more knowledgeable people on here is the above worth having? Any feedback would be great

Luke

kingstreet

Yes. It's invaluable.

You are looking for Permanent Health Insurance and it is best bought with independent advice to ensure you get the right cover at the right price.

SonOf

Yes. It may be one of the most important insurances you need.

unrecordings

I nearly cancelled mine so many times. I had the policy for 20 years or so. Now I'm terminally ill, I'm so glad I didn't cancel it - I'm having a comfortable death. All I need to do is keep breathing

Luke_123

Thanks for the prompt reply guys , so I’ve been looking at one in particular, says you have to wait 3 months before making a claim, then you can claim for 12 months , but also they offer cover for the lifetime of my mortgage, does it mean I could make multiple claims if ever needed?

unrecordings

Luke_123 wrote: »

Thanks for the prompt reply guys , so I’ve been looking at one in particular, says you have to wait 3 months before making a claim, then you can claim for 12 months , but also they offer cover for the lifetime of my mortgage, does it mean I could make multiple claims if ever needed?

Well, depends on the policy, but I had an initial three month wait, I think the idea being you use up your sick pay (and holiday I guess) before the claim kicks in. In my experience once 'terminal' comes into play then the 12 month limit goes out of the window - I've been getting payments for around three years with an annual review (which is pretty much just checking I'm still here

In terms of protecting your mortgage, I got a separate policy, as recommended on here through (I think) Cavendish

csgohan4

Insurance is a scam when you don't need, but you'd be unwise not to get income protection. I've have it and don't regret paying the premiums. Very useful when you can't work if your ill and need to pay the bills.

kingstreet

Luke_123 wrote: »

Thanks for the prompt reply guys , so I’ve been looking at one in particular, says you have to wait 3 months before making a claim, then you can claim for 12 months , but also they offer cover for the lifetime of my mortgage, does it mean I could make multiple claims if ever needed?

Why three months?

PHI allows you to choose the deferred period (normally 4 weeks to 52 weeks) to suit your savings and any employer benefits. If you work in the public sector you may qualify for six months full pay, then six months half pay, so a 52 week deferred period would suit you best.

Someone self-employed with little savings would need closer to 4 weeks.

You should be looking for cover until retirement, or at least the term of your mortgage. You can't say how long an illness/disability will last. The average PHI claim is six and a half years at last count.

The factors influencing the cost of cover are;-

age
term
occupation
amount
smoker status
guaranteed/renewable/reviewable premiums
claim payment period
deferred period
state of health.

This is a list of the products Defaqto rates for this cover - highest to lowest;-

https://www.defaqto.com/star-ratings/life-and-protection/income-protection/

and you should take care that different providers will have different products with different ratings based on budget up to comprehensive.

As stated earlier, this cover is best bought with independent advice. Avoid banks and building societies as well. They usually offer "badged" products (Nationwide is an L&G badged product) but normally at a higher premium.

SonOf

Thanks for the prompt reply guys , so I’ve been looking at one in particular, says you have to wait 3 months before making a claim, then you can claim for 12 months , but also they offer cover for the lifetime of my mortgage, does it mean I could make multiple claims if ever needed?

The ones where you can only claim are the Payment protection plan types of income protection (PPI) or the very budget versions of permanent Health Insurance (PHI). Both should be avoided and only considered an option of last resort.

Be wary if you are looking at comparison sites as they only tend to do the PPI version and a small number of PHI providers with online applications. Not those with manual applications or those that can APIo into comparison sites.