Income Payment Protection vs Mortgage PPI

sydneygirl_2

We are curerntly in the process of getting a mortgage with our bank (HSBC), and they have offered us their standard 'Mortgage Payment Protection' (covering accident, sickness & unemployment), which pays out a proportion of your mortgage payments for up to 12 months.

I found this much cheaper at Help-U-Pay (Pinnacle insurance), as recommended by this site.

However, they also offered us 'Income Payment Protection', which I cant find any reference to on this website or in any posts. Is this a common form of insurance to take out? Apparently it potentially covers up to 50% of your gross salary continually, until retirment age. (this is only for accident and sickness though, not unemployment).

I dont really understand the difference and am wondering if anyone has taken out either/both and whether 'income payment protection' insurance is worth it, or just a big scam??

Please help!

payless

http://forums.moneysavingexpert.com/showthread.html?p=882368#post882368

cattie

As someone who took out both when I first started a mortgage, they proved to be worth every penny. When I became ill & subsequently lost my job because of my illness, the mortgage protection insurance kicked in & helped me keep the roof over my head. As I live alone & there being no one else to help me financially should I become ill, I had also taken out income protection insurance in case of sickness & after 6 months of continuing illness, this started paying me a monthly sum of 50% of my then salary. About 5yrs down the line, this still continues to be paid. Each year my GP & consultant is asked to give a medical report to the insurance company & I assume as long as they are satisfied that I'm not capable of any work, then the payments will continue.

If you can possibly afford it,then go for it, as as with me, you just never know what is around the corner.

sydneygirl_2

Thanks so much for sharing your story Cattie - I'm glad you are getting the extra cover you need.

I was under the impression that Income PPI could kick in right away if you didnt have MPPI...is that not true?

Which provider did you go with? HSBC is quoting me about £80 a month for IPPI which would cover me indefinitley , but only covers accident and sickness (not unemployment).

On the other hand, PayProtect is only going to cost about £34 a month and will cover all three...BUT it only covers for a maximum of 12 months at a time.

i cant seem to find any other insurers that do the long term cover... it looks like the most common things is to cover for 12months only?

payless

there are many providers - but as I mentioned on the other thread, due to being more complex , even if you do get online quotes for IPP , you need to know what you are looking at as products are slightly different/ more complex

IPP is sometimes arranged with a short defer period ( end of sick pay) , and sometimes with a long defer ( to kick in after mppi ends)

dunstonh

One thing you do not do is just compare price. A budget plan can end up being a virtual waste of money. You need to look at how and when they will pay out and the qualifying rules.

payless

dunstonh wrote:

One thing you do not do is just compare price. A budget plan can end up being a virtual waste of money. You need to look at how and when they will pay out and the qualifying rules.

valid comment for MPPI , IPP and indeed Crit Ill