Income protection insurance issues

DullGreyGuy

When I bought my PHI I was given the choice of evidencing my income up front or deferring it to the point of claim. As I bought the insurance shortly after going freelance I went for the later because I had not great evidence of income at the level insured at that time. Its always been clear, to me at least, that there is a risk that illness follows a period of low work and so could result in lower payout but given I insured for about 40% of income there is a reasonable headroom to still get the insured rate even on a lower income. 

Most manufacturers outsource the selling of their products and there are always risks that the seller makes mistakes (accidentally or intentionally) in selling... the Consumer Rights section is full of people complaining that products didnt match the expectations the seller had set. Customers can also miss-buy as well as being miss-sold to. Saw someone the other day go into a shop and buy a sun parasol and then come out and try and use it as an umbrella... its fairly likely the mistake was purely the customers but they could claim it was misleading to have the two items next to each other. 

Its not practical that a manufacture checks each and every sale has been made correctly... they can provide training materials, do audits etc but wont catch everything. Similarly sellers of insurance are now regulated and so the FCA will be doing checks on training, governance, audits etc. There'd be notable cost implications if every single item had to be checked by external parties. 

JamesMN

Weighty1 said:

What I would suggest is speaking to the insurer and asking them to average out your earnings over the last 3-years based on the fact that Covid was an highly unusual situation and is therefore giving them a false view of your earnings.  Alternatively, ask if they would even discount the Covid year/s completely?  They may want to see that your current earnings have returned to pre-Covid levels thereby showing with a higher degree of certainty that the reduction was an anomoly and not a downward trend in earnings, however, this may be difficult if you've not been able to work normally since the injury which caused the claim.

I did this and got a firm no on averaging out over the covid years, last 12 months only, per the T&C's was the response.
TBH, I think I've asked for as much pragmatism as I thought was appropriate but although they wouldn't play ball with that, they did offer a partial refund of premiums which is as much as I can reasonably expect I guess.

dunstonh

JamesMN said:

Weighty1 said:

What I would suggest is speaking to the insurer and asking them to average out your earnings over the last 3-years based on the fact that Covid was an highly unusual situation and is therefore giving them a false view of your earnings.  Alternatively, ask if they would even discount the Covid year/s completely?  They may want to see that your current earnings have returned to pre-Covid levels thereby showing with a higher degree of certainty that the reduction was an anomoly and not a downward trend in earnings, however, this may be difficult if you've not been able to work normally since the injury which caused the claim.

I did this and got a firm no on averaging out over the covid years, last 12 months only, per the T&C's was the response.
TBH, I think I've asked for as much pragmatism as I thought was appropriate but although they wouldn't play ball with that, they did offer a partial refund of premiums which is as much as I can reasonably expect I guess.

Putting a cynical hat on, it may well be that the insurer has calculated the differences between averaging over a period, excluding covid or refunding some premiums and decided that paying some back as a refund is the most cost-effective solution for them.  Plus they get to deflect the criticism to an entity that no longer exists and is not in a position to stick up for themselves and provide evidence to counter their allegations.

Weighty1

JamesMN said:

Weighty1 said:

What I would suggest is speaking to the insurer and asking them to average out your earnings over the last 3-years based on the fact that Covid was an highly unusual situation and is therefore giving them a false view of your earnings.  Alternatively, ask if they would even discount the Covid year/s completely?  They may want to see that your current earnings have returned to pre-Covid levels thereby showing with a higher degree of certainty that the reduction was an anomoly and not a downward trend in earnings, however, this may be difficult if you've not been able to work normally since the injury which caused the claim.

I did this and got a firm no on averaging out over the covid years, last 12 months only, per the T&C's was the response.
TBH, I think I've asked for as much pragmatism as I thought was appropriate but although they wouldn't play ball with that, they did offer a partial refund of premiums which is as much as I can reasonably expect I guess.

Out of interest, which insurer is your cover with?

If it's an insurer that no longer accepts new applicants, a "closed book" so to speak then then are more likely to follow the T&C's to the letter, simply because there's no benefit to them of being more amenable since they aren't looking to attract new customers any longer.

JamesMN

To follow up on this, I've received a refund from the provider of around 45% of the total premiums over the last 22 years which I'm happy with so, case closed I guess.