Terminating Income protection policy

amarquez

Wondering if anyone can advise me on this: I got a letter from my provider of Income Protection insurance saying that they no longer want to provide this type of insurance and the policy that I have had for many years will terminate end of March. I did a little searching and it looks like these kind of policies cannot be cancelled according to the FSA. Should I accept what the insurance company say or should I contest it?

Aretnap

Depends what sort of Income Protection you have. It comes in two flavours.

The Diet Coke form (often called Accident, Sickness and Unemployment insurance or something similar) is a rolling one year contract like home or car insurance, which renews every year, and the insurer is free to offer you renewal terms or not each year.

The full fat version (Permanent Health Insurance) is a long term contract which the insurer cannot usually cancel once it has commenced assuming you keep paying your premiums etc. An insurer can still go out of business or exit the market of course but in that scenario the FCA would generally require the insurer to find another provider to take over your policy, so you would remain covered 

So the first question is which sort do you have?

dunstonh

 got a letter from my provider of Income Protection insurance saying that they no longer want to provide this type of insurance and the policy that I have had for many years will terminate end of March.

That makes it sound like it is PPI rather than PHI.   PHI (permanent health insurance) cannot be cancelled by the insurer.    PPI can and many providers or distributors of PPI have been ending its provision.

. I did a little searching and it looks like these kind of policies cannot be cancelled according to the FSA.

Assume you mean FCA.   PHI cannot be cancelled by the insurer.  That is where the "Permanent" bit in the name coms from.    However, PPI can.

Should I accept what the insurance company say or should I contest it?

You won't be able to argue a PPI policy ending.    You could if it was PHI but it won't be PHI.   Maybe take this as an opportunity to get real income protection rather than the basic PPI product.

DullGreyGuy

amarquez said:

Wondering if anyone can advise me on this: I got a letter from my provider of Income Protection insurance saying that they no longer want to provide this type of insurance and the policy that I have had for many years will terminate end of March. I did a little searching and it looks like these kind of policies cannot be cancelled according to the FSA. Should I accept what the insurance company say or should I contest it?

FSA is the Food Standards Agency these days, they dont have much to say on Income Protection. The FSA was broken up into the PRA and FCA in 2013, the former deals with financial stability, the later with conduct.

IP is a marketing name that covers more than one product, ASU (or PPI as it used to be marketed as) decided to also call itself IP when its former marketing name because toxic. PHI isn't a name most customers recognise hence they too call themselves IP.

ASU can be cancelled by the insurer, it's an annual or even monthly policy with a renewal but as with all short term insurance it can be cancelled by the insurer. PHI is a form of long term insurance and only exceptional circumstances allows the insurer to cancel (eg non-payment). You need to understand which product you hold, if you get annual quotes and the prices change by anything other than RPI then its almost certainly ASU