News0 min ago
Income Protection
5 Answers
I am looking to take out an income protection plan, the type which will pay all household bills, petrol, food etc should I ever find myself unemployed. I have searched through the internet but there are so many to choose from. Can anybody recommend a company who offers this? Or is there anything I should be looking out for? Any advice would be appreciated.
Thanks in advance.
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A couple of things spring to bear in mind;
Employment. Are you self-employed or do you work in an industry where there is under-employment. eg nursing. On either count, you may find it impossible to claim under your policy. With the latter they would be likely to dismiss your claim and say 'you are skilled and there are plenty of jobs out there"
If in doubt, ask the insurance supplier and get it in writing.
How long before payments kick-in if you make a successful claim? And how long do they last?
There are usually exclusions on this - eg 'No payments for the first six months' or 'Payments only last for a X month period in any single claim'`
One may suit you more than the other. The 'No payments for X months' may suit you more because you might always keep sufficient savings to cover this initial period and it's a better policy once it does pay out. Or, because the nature of your employment / skills you may want a policy that pays straight away, as you would not envisage yourself being unemployed for more than a few months.
Always know what you are buying, what you are and what you are not covered for. If you see an advisor, (independant or otherwise), salesman or other agent of the vendor face-to-face, ask them these sort of questions making them specific to your circumstances and your employment, and again, get their responses in writing.
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A salesman could quite happily say "oh, of course you're covered for this and that" just to get you to sign on the dotted line. Then later, when you find your claim is refused, you'd have difficulty proving that you were told you were covered, unless it's in writing.
Sorry if this makes it sound heavy !! But get these basics sorted, and then it's entirely up to you and what you feel is the best policy for YOUR circumstances.
Best of luck !
No two policies are the same I'm afraid, so it is a question of shopping around. Obtain the terms and conditions of a number of policies and compare them. Most policies will exclude cover for pre-existing conditions, e.g. if you suffer with a particular condition, such as a bad back, before taking out the policy, you will not be covered if you are off work as a result of this particular condition. You should look out for policies that cover you if, as a result of accident or sickness, you are unable to perform your "own job" (this is the terminology used). This means the job you currently perform in the same company. Some policies say as long as you can perform a "suited occupation", you cannot claim under the policy - basically, you have to be totally unable to perform ANY occupation under these policies to be eligible to claim, rendering them pretty useless to most people (though, of course, these types of policies are a lot cheaper as you would expect). As trilobite has said, the longer your "deferred period" is, the cheaper your premiums will be. If you have company sick pay for instance that will cover you for 6 months, then sufficient savings to cover you for, say, a further 3 months, then you could set your deferred period at 9 months, which would result in much cheaper premiums.
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