Sickpay Insurance

Parky29

Hi guys,
I've recently started a new job that only pays SSP for sick days, all my previous jobs had company sick pay and meant any time off would be paid at my normal rate. I rarely have any time off but worry that if I do will have a massive gap in my salary is there an insurance I should look at taking out to cover for the difference in my monthly salary and the statutory sick pay rate?
Thanks.

Sandtree

There are two forms, unfortunately both get called "income protection"

1) Accident, Sickness & Unemployment (also known as PPI) - the "U" of ASU is optional but not many offering it these days, the limits are lower, premiums reviewable at least annually and payouts limited to 12 months normally. Pre-existing conditions blanket excluded but what that means isnt reviewed until the point of claim

2) Permanent Health Insurance - is the full fat product, limits can be much higher, underwriting is done at point of purchase so cover is fixed and premiums are equally fixed for the policy. Payout continues for as long as you are sick up to a date, which will normally be your intended retirement

Pricing follows the level of cover you get, for short term protection ASU is ok but some find themselves priced out of renewing in later years. The average claim on PHI is 6 years in duration so if you get a major illness it is clearly the winner.

Parky29

Thanks, but would you recommend me getting the insurance? Ive I'm off sick for two weeks would be a big loss to my pay at the end of the month. Im not really thinking about long term sick just even short term there is a big difference between SSP and a salary. 

lisyloo

Parky29 said:

Thanks, but would you recommend me getting the insurance? Ive I'm off sick for two weeks would be a big loss to my pay at the end of the month. Im not really thinking about long term sick just even short term there is a big difference between SSP and a salary. 

Policies often have a waiting period (can’t remember the technical term) otherwise they’d be paying out for every single day off.
the longer the period the cheaper the insurance e.g. an insurance that doesn’t cover you for the first 2 months will be cheaper than one that doesn’t cover you for the first 2 weeks.

you should also consider having a savings pot. It sounds like you couldn’t manage for long and insurance usually had this waiting period.

Sandtree

Parky29 said:

Thanks, but would you recommend me getting the insurance? 

You’d need to speak to an advisor to see if it works for you.For me as the sole breadwinner and notable mortgage etc I feel we need the long term option as savings would only cover a few months 

Weighty1

You are going to struggle to get cover whilst you are currently off and even if you did there's a strong likelihood that the issue that caused you to be off work would no longer be covered.

Sea_Shell

This maybe a case of preparing to "self insure", but you'd have to get some quotes and do the maths as to which is best for you.

It's sometimes referred to as having an emergency pot of savings.

Most policies would have an excess period, I believe.