Income Protection - recommendations please

loopyloo_4

I hope someone can point me in the right direction.

I want to take out some income protection insurance but feel my banks policy is a little on the steep side for monthly payments.

I am 29, f, smoker, and would like to be covered for when I am off sick from work for more than a month as my company would stop paying me then. HSBC have quoted me £55 per month to pay out £1051 per month indefinitely which is enough to cover my rent/bills etc.

Any ideas people??

dunstonh

I have never known a policy pay out indefinitely.  Most PHI policies have a maturity date which you get to choose.  Ideal maturity date is your selected retirement age.

PHI policies are occupation rated in addition to age, term, smoking and health.    Smoking certainly hits the rate.

Not all plans are created equal and have different definitions of how they will pay out.

Doing a quote on your details and assuming class 1 occupation and taking £1051pm until age 65 on a level basis.  The cheapest was £42pm rising to £124pm for the most expensive.

bobby64

That sounds real pricey, my recommendation would be to search all the providers and get the best quote.
I have a income protection policy with a company called Pioneer. Claims history with this company are pretty good.

payless

My guess is DD did a wide search -

taking it to 65 can make it seem expensive over say age 60.

I prefer index linked plans ( again - as I guess DD would , and was quoting level for comparison basis)


( of course being female and smoker does not help!)

Pioneer often comes out good priced for manual occupations

MylesBetter

Is there a search engine for this type of insurance?

Martin Lewis on a C4 programme recommended this type of policy over Critical Illness cover and I have now got around to this area of my money saving strategy.

I never see adverts for this type of insurance.

I cannot find an article written by Martin on this subject on the WEB site to give guidance. Hopefully one is in the pipeline.

bobby64

How is Friends Provident as an Income Protection Provider??

dunstonh

That sounds real pricey, my recommendation would be to search all the providers and get the best quote.

That is what i did using one of the main quotation portals. There were pages of companies. The prices are what you expect for a smoker, female and going those extra five years until 65 and having 1 month deferment.

You have to remember that there are varying levels of cover so you cannot compare like for like just looking at the price.

As payless mentioned, increasing benefit is better (albeit more expensive at outset but cheaper in long run).

Friends Provident were about 8th on the list IIRC.

Martin Lewis on a C4 programme recommended this type of policy over Critical Illness cover and I have now got around to this area of my money saving strategy.

i doubt it would have been as clear cut as that as Martin tends to talk in more generic terms when i have listened to him on radio. When giving advice, I would recommend the one which is more appropriate for the person rather than give an absolute answer as to which is best.

I never see adverts for this type of insurance.

Its mostly sold by advisors and most policies can only be bought from advisors or those with access to an active agency. I dont believe its that profitable to insurance companies and it certainly isnt for IFAs. That may also be a reason. It also has a lot of options available to build in and a variety of ways to impact on the premium so it isnt as easy to compare quotes on a like for like basis unless you know what to look out for.

Advisors will often sell two policies offering split benefits to keep the cost down. ie, one with an initial deferment of 3 months and one with 6 months, each covering half the monthly income required. This assumes that an emergency fund could be used for the initial period.

To give an idea of cost difference, a non smoker male on the same terms but with a 3 month deferment came out at £14pm

loopyloo_4

Thanks for the search DD. ;D

I guess HSBC wasnt actually that overexpensive. I am in the process of giving up smoking at the moment but have been advised not to say that i am a non smoker until i reach the 6 month stage and then my premium will go down.

Thanks to everyone that put in their suggestions.

dunstonh

It's usually 12 months to be free of smoking.

Also, remember that they are not all like for like and often the cheapest ones are quite poor.