Income Protection Insurance

xeno_2

Hi Everyone,

For as long as I can remember I have had income protection insurance to cover accident, sickness and unemployment.  I do not expect to have to use it, and particularly for the sickness as I have a pre-existing health condition that they wouldn't cover and is likely to be the reason if i was sick, but i do want the unemployment cover as a safety net just in case the worst was to happen.

I have just had my renewal letter through and have been informed that my current provider is moving out of the market and they have been replaced with a new provider instead.  This provider is increasing the premium by around 45% (£65 to £91 per month), which I think is horrendous.  Is this actually legal?

I have been in a similar position before when a provider moved out of the market and at that time I moved provider.  Unfortunately this year, I fear we are in a bad situation as when I have looked to get alternative quotes, I am unable to find anything that will cover Unemployment due to COVID. 

Is the price hike allowed and if so I guess I have to suck it up for this year and try to move when everything settles down?

Weighty1

Yes, totally allowed.  It's an annually renewable policy so the terms and costs can be changed by any extent year on year.  You're actually lucky if they've found another provider to offer the unemployment aspect of cover as that's disappeared for clients looking to take out a new policy so they've kind of got you over a barrel.

dunstonh

For as long as I can remember I have had income protection insurance to cover accident, sickness and unemployment.

That is payment protection rather than income protection.  (although some PPI providers would call their product income protection to deflect from the fact they were PPI plans).

have just had my renewal letter through and have been informed that my current provider is moving out of the market and they have been replaced with a new provider instead.  This provider is increasing the premium by around 45% (£65 to £91 per month), which I think is horrendous.  Is this actually legal?

PPI is in a hard market.  Hardly anyone buys it anymore (for obvious reasons).  So, the cross-subsidy pool is much reduced.

Also, cornavirus made the risk of redundancy much greater.  Insurance is priced to cover risks.  

Yes it is legal.  Providers are allowed to decide how much they want to charge.  just as you are allowed to say yes or no to having it.

Is the price hike allowed and if so I guess I have to suck it up for this year and try to move when everything settles down?

You can probably count the number of providers left on one hand. 

mattyprice4004

Why wouldn't it be? 
Unless you have a guaranteed 'for life' policy of some kind, any insurer can opt not to continue cover if it's no longer viable for them. 
They're a business, and if they feel that it's no longer worth them offering a service they can choose not to offer a renewal. 

csgohan4

Good idea for future readers to consider the more complete income protection, sure it doesn't cover unemployment, but at least your not at the whim of market forces, whereas fixed annual/monthly premiums for the entirety of the policy and you know it will pay out on terms your happy with should illness stop you working

Alot of unemployment insurers have pulled out as it was an unsustainable business for obvious reasons and entirely legal