Unemployment Insurance

Ahawky007

Hi, I have for years paid for income protection insurance in the event if sickness, injury or redundancy. I have thankfully never claimed. My provider circa 6 months ago increased the premium by about 30% due to the effects of Covid 19. I have now had a letter stating that they increasing the premium again, this time by a massive 125%. They are stating that this level of cover cannot be sourced elsewhere currently and that the increase is necessary due to the hit they have allegedly received during the pandemic. This now makes the cover unaffordable really at £176 per month.
Are they allowed to do this? Is anyone aware of where I can gain an alternative quote at this time?
Thanks in advance. 

Sandtree

What you have bought is ASU or otherwise known as PPI. This is a short term policy with reviewable premiums and so they are free to adjust the premiums as you get older or as their claims experience gets worse.

Many have fully pulled out the PPI market this year or at a minimum only offering AS cover and therefore the fact there is an offer to continue cover is arguable better than many others who are simply being told their policies are being stopped. You are free to shop around, the aggregators/comparison sites often cover PPI and then can decide if the premiums are appropriate, if theres cheaper out there or if you decide its not worth the cost.

cheshirelabrador

Sandtree said:

What you have bought is ASU or otherwise known as PPI.

IPI and PPI are two different products.

If you bought a car on finance and purchased insurance to ensure you could still make repayments even if you lost your job or were unable to continue working then that would be PPI.

The original post mentions IPI, this is where the insurance gives you a payout relating to your monthly pay for a number of months post-redundancy. You can take out this insurance even if you have no outstanding finance but by taking it out you have an income post-redundancy which may affect which state benefits you can and can't claim.

Sandtree

Both are ASU, just people know it by the term PPI. In marketing you can all it Rubber Dub Dub insurance if you want but it remains ASU and will attach to the A&H reinsurance treaties.

IPI is a term you just made up, Income Protection is a marketing term that can cover ASU or PHI. PHI (Permanent Health Insurance) only covers the "AS" part of ASU (ie no redundancy cover as standard - though some tack on an ASU style "U" as an optional extra) but is the full fat version as it will continue paying the amount until you are fit to return to work or until your declared retirement date whereas ASU stops paying after 12 months in most cases (24 in the better quality ones). Average duration of a PHI claim is in the region of 6 years.

The other difference with PHI is that its a long term insurance so premiums are guaranteed for the duration (ie your retirement date), no increasing because you're getting older or because of Covid etc. Only increase would be if you index linked the benefits in which case premiums raise by the same indexation. ASU is an annual policy with reviewable at least annually at renewal and often at each month end.