Income protection after job loss

Luke451

Hi,

I wonder what would happen after a claim for income protection and a job loss.

Let's assume that I claim to the insurance, but after X years, the company gets tired of it and fires me, or they find some little rule in my contract (highly possible in my situation) and they fire me based on that.

Same way if the company goes busted and I lose my job because of that.

Would my income protection keep paying???

Would it be paying at the previous rate or any reduced rate?

(the questions are based on the law, not their regulations that I didn't find btw)

I've seen the major companies online but no one has anything about it described, I've red every document they put available in public...

Just looking at Britishfriendly, it seems that they pay up to 1500 monthly if there is an income reduction, but it doesn't talk about income LOSS.

Same way, does it mean that if I'm NOT employed when I make a claim, the policy won't cover me?

HappyHarry

Is this a personal IP policy or one through your employer?

Luke451

HappyHarry said:

Is this a personal IP policy or one through your employer?

Personal, but I added more details to the initial post

HappyHarry

An income protection policy is designed to replace most of your income if you are unable to work through illness or accident. If you had no income at the time, then there would be no income to replace and hence no benefit.

HappyHarry

With an individual policy, If you are successfully claiming a benefit then it matters not if your employer fired you or goes under.

elsien

It was some years ago now so I don’t have the details anymore, but I’m pretty sure my income protection policy would not have paid out if the job loss was due to something I’d done.  For example getting myself fired. Although it did cover for redundancy.

DullGreyGuy

I'm afraid I cannot follow, I think you may be asking what happens if you have Income Protection but lose your job and subsequently become sick?

IP unfortunately isn't a technical name for any insurance product and more than product is sold under the marketing name... both ASU/PPI and PHI cover uses the term. Whilst in principle there are similarities in that they provide replacement income one if a short term annual policy and the other a form of long term protection insurance.

Luke451

HappyHarry said:

An income protection policy is designed to replace most of your income if you are unable to work through illness or accident. If you had no income at the time, then there would be no income to replace and hence no benefit.

So it matters only what was my employment status when the incident occurred and not if I lose the job later?

I'm curious to know if the claim date prevails instead, but I guess not.

Luke451

elsien said:

It was some years ago now so I don’t have the details anymore, but I’m pretty sure my income protection policy would not have paid out if the job loss was due to something I’d done.  For example getting myself fired. Although it did cover for redundancy.

Sorry I just asked about incident and illness, I wasn't asking about the unemployment insurance.

Luke451

DullGreyGuy said:

I'm afraid I cannot follow, I think you may be asking what happens if you have Income Protection but lose your job and subsequently become sick?

IP unfortunately isn't a technical name for any insurance product and more than product is sold under the marketing name... both ASU/PPI and PHI cover uses the term. Whilst in principle there are similarities in that they provide replacement income one if a short term annual policy and the other a form of long term protection insurance.

I refer to the Personal Income Protection, I'm not sure in whatever other ways it's called by the companies, but look at these examples:

https://www.aviva.co.uk/insurance/life-products/income-protection-insurance/

https://www.royallondon.com/insurance/illness-income-protection/income-protection/

https://members.britishfriendly.com/why-income-protection/

You scenario is interesting, I didn't consider it, so I rephrase:

1. What happens if you have Income Protection but lose your job and subsequently become sick? I think that I'm not covered, this is a scandal but what can I do... I wonder if I can cheat it by having an employment insurance

Normally they ask the P60, so maybe they consider me working for the last financial year as long as I've been working enough, but it's not easy to stay on top of 16 hours, and in any case, between 16-40 hours weekly, Britishfriendly pays up to 1500 for example, SSP would reduce that too.

2. Consider that I'm working when I claim, so the claim goes through.

Let's also assume that after X years, the company gets tired of it and fires me, or they find some little rule in my contract (highly possible in my situation) and they fire me based on that. The company may be paying something because of my reduced hours or nothing.

Same way if the company goes busted and I lose my job because of that (claim done years before), will they continue to pay?

Weighty1

If you start making a claim and subsequently get fired/laid off then this does NOT affect the claim because you would be treated as being unable to work (provided you can still provide a sick note).  Once your GP is no longer willinng to provide a sick note then the policy will no longer pay.  If you'd been fierd you would then need to find alternative employment.

If you were fired/laid off and THEN became sick then you would not have an income to protect since you were not working at the point when the claim arose so no claim would normally be paid.  That said, there are some policies which will guarantee to pay a minimum amount of income (often £1,500/month) irrespective of your income at the point of a claim arising.  However, in this instance your inability to work, because you are NOT employed, could be assessed on 'activities of daily work' (ADW) which are typical everyday tasks of which you may need to be unable to do 3 of 6 before a claim would be paid out.  This ADW claims criteria makes it far more difficult to claim on a plan than whilst employed.