Income protection schemes

[halo25]

As above, are these any good?

I had a meeting with my bank the other day who quite honestly said they werent up to much as the exclusions meant that half the time they don't pay out.

What he said was that it would be highly likely I could get a job that would cover the amount the insured within a few weeks in the scenario of being made redundant and the monthly premium was better off in the mortgage. He also said most of them had small print which said you had to take the first job coming no matter what it was.

Anyone any thoughts/experiences on this - I mean the sum insured is just enough to cover the mortgage, but I think he had a point...

Cheers

[Timmy35]

Save up 3m worth of outgoings instead. ( 6m ideally ).

[minimax]

Timmy35 said:

Save up 3m worth of outgoings instead. ( 6m ideally ).

just so.

payment protection is generally not a good thing.. income protection is much better, the differences between the two are such that I can't explain on a friday after a liquid lunch but scotal might be able to muster the effort later perhaps (who knows!)

one is a blanket cover all policy shot through with holes, the other is a proper, individually underwritten insurance policy.


while i'm on the subject, if you're looking at getting this sort of thing, please try for a policy which is underwritten up front, it will save you immense amounts of time and trouble

par example, if you have diabetes you have to declare it (usually) so the underwritten after the fact policy will be fairly easily be able to wriggle out of payment come claim-time by stating causal or derivative result, shoull've declared it properly, should done this that and the other.

if your policy is underwritten up front you go through all the hassle and doctors reports/medicals and maybe a medical from the insurer too but when you've jumped through all the hoops you *know* you're covered.. providing everything you said was truthful - and please, it just does not pay to lie to insurers

HTH

[Kieran XJR]

Timmy35 said:

Save up 3m worth of outgoings instead. ( 6m ideally ).

It might take a little while for most people to save up 3 million quid.

[halo25]

Whilst 6m would be great, its highly un-likely I will ever get to 1m let alone 6!!!

Thanks for the comments, going to mull it over

[Jasandjules]

Quite often they don't pay out for six months anyways. What's the point in that? You're already screwed at that point, so best as above to save the cash in the bank to cover yourself.

[Simpo Two]

halo25 said:

Thanks for the comments, going to mull it over

It comes down to 'how lucky do you feel'?

Insurance policies are designed to make profit - lots of profit - for the insurance companies. Therefore all things being equal you will lose.

So unless you feel your career is iffy, I'd simply save the premiums yourself. That way if you don't claim, you get to keep the money

[outlaw biker]

Apparently Which magazine did a report on this recently...might be worth reading. I think they recommended searching out independant protection plans that cover everything, credit cards, loss of earnings, mortgage repayments e.t.c.

[tom77]

halo25 said:

As above, are these any good?

I had a meeting with my bank the other day who quite honestly said they werent up to much as the exclusions meant that half the time they don't pay out.

What he said was that it would be highly likely I could get a job that would cover the amount the insured within a few weeks in the scenario of being made redundant and the monthly premium was better off in the mortgage. He also said most of them had small print which said you had to take the first job coming no matter what it was.

Anyone any thoughts/experiences on this - I mean the sum insured is just enough to cover the mortgage, but I think he had a point...

Cheers

I used to work for an insurance company which offered all kinds of products, life cover, critical illness and income protection.

On the whole, it is a good product. The one thing to bear in mind is whether it's offered on an 'own occupation basis' or a 'working tasks' basis.

Own occupation means if you can't do your own job through accident or disability, you qualify to get the benefit. This is based on what occupation you do, normally office work where the chances of having an accident which impairs your ability to work is slimmer. I.e. losing a thumb doesn't stop you using the phone, or typing etc.

Working tasks is normally offered to people who do more manual jobs. Where losing a thumb could means that you cannot do your job. On this basis, your ability to work will scored on how you perform 'working tasks' such as walking, lifting, seeing, hearing etc. It is pretty hard to qualify to this benefit unless you're are pretty much spackered.

Most policies follow this basis even if the terminology differs. Check this out before deciding if you're willing to buy it.

'Deferred period' is the time between making a claim and the company starting to pay the benefit. Again, this depends on your occuption. Even if you have to wait longer to get the dosh, it will still help if you're unable to work! How will you pay the mortgage?

Saying - 'You're better off putting the money into your mortgage' is completely short sighted and misses the point of protection products completely. You'll only ever consider it good value if you have to make a claim and then you'll realise it's the best money you ever spent. Just like any insurance product...

Think about it wisely, writing off insurance companies as 'money grabbing bastar*ds' is usually the result of a bitter exchange between someone who was dishonest when applying and then felt bad when they were found out.

Sorry for the dry post, pm me if need any more guidance in this area..

tom