Income Protection or Permanent Health Insurance

Hi

Can you suggest or recommend proper income protection (also known as permanent health insurance - PHI)?

I've recently purchased a property (mortgaged) and would like to get covered as things happens in life in the most unexpected moments.

When I contacted some (recommended by MSE) brokers they usually wants to sell me some tricky Income Protection or Income Protection for a short term (12-24 months) or with many caveats and exemptions.

I am of the view that all the 'small print' in those type policies must be read as there are many exceptions and situations when the insurer would not pay out.

Anyone has got an experience with using such insurance? Do you know anyone who actually got paid when in need?

Thanks.

Comments

  • kingstreet
    kingstreet Posts: 38,686
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    If you want a benefit paid in the event of illness or disability, Income Protection, or PHI is the best option.

    Choose the "own occupation" definition of disability.

    Your medical history is considered at point of sale and terms are offered taking that into account.

    Benefits are paid until the end of the policy term (retirement?) or until you are fit enough to return to work and are tax-free.

    The other options you mention Accident, Sickness & Unemployment or Mortgage Payment Protection Insurance cover normally only offer short-term benefits which are underwritten at point of claim.

    However, you will normally find Unemployment cover is always limited to a shorter payment period, even when bundled with an IP/PHI product.

    Independent financial advice is the best route for such advice.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • dunstonh
    dunstonh Posts: 116,027
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    When I contacted some (recommended by MSE) brokers they usually wants to sell me some tricky Income Protection or Income Protection for a short term (12-24 months) or with many caveats and exemptions.

    MSE is owned by a comparison site. Comparison sites prefer the PPI version as its easier to put in place than PHI (bar some budget versions). Proper PHI is still dominated by IFAs and whole of market insurance brokers/advisers as far as distribution is concerned.
    Do you know anyone who actually got paid when in need?

    Yes.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Thank you for the replies so far.

    I've already found an independent broker and discussing full Income Protection insurance options.

    Looks like it is worth to take it as I would struggle without steady monthly inocme if got sick or had an accident.
  • Private medical insurance will normally pay for a private hospital, help you to avoid NHS waiting times and can cover specialist treatments. However, it does not counteract the loss of income that can happen whilst you are getting treatment.

    Critical illness cover might be a better option rather than going through the income protection route. It can help to pay out for serious illnesses such as heart attack, strokes, etc. and can be used to help pay for medical expenses as well as your everyday bills. Some providers such as Vitality offer a serious illness cover which pays out for more illnesses and will pay out no matter what the severity but it can be slightly pricier.

    Income protection can help cover any loss of income during this time, but won't necessarily cover medical expenses.

    The best route is a broker to help you find the right solution for you. but it's also worth reading the small print. Some providers will have a set amount of days before they will pay out and each company has different definitions of what they determine an 'illness' to be.

    Good luck finding the right thing for you.
  • csgohan4
    csgohan4 Posts: 10,587
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    edited 28 April 2018 at 6:59AM
    income protection/Life insurance (if you have dependants)

    Critical insurance

    private Health insurance


    In that order, if you can afford all of them go for it, if not the first one is a must
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Why do my company's phi insurers take £5900 a year off of my 50% salary if I claim benefits or not. I am currently in the 2nd year and are receiving £19.26 per week benefits. That doesn't amount to £5900. Any help appreciated
  • I have had this benefit from my employer for the last 18 years, we are now going through Contract Harmonisation as we have been bought out by a different company and this is one benefit I will lose. Looking at the market for a like for like replacement I am looking at in excess of £100 a month. 75% salary until I retire!!
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