Protecting your Income
Income protection plans have been given a lot of bad press over recent years due to the ‘PPI Scandal’. This was caused by the wholesale ‘pushing’ of Payment Protection Insurance (PPI), usually by finance providers, to cover personal loans & credit card payments. The main issues with PPI were caused by the policies being sold to those that were not aware that they had purchased, or thinking that the policy was far more comprehensive than it really was. Unfortunately, the latter customers did not find out its’ shortcomings until they went to make a claim which was was rejected.
The best Income Protection insurance has little in common with PPI. Its proper name is Permanent Health Insurance and that is what it does:
It is PERMANENT, which means that the insured is normally covered for the rest of their working life. In other words, a claim at age 52 could continue to replace income to normal retirement age if the customer cannot return to work.
It is the customer’s HEALTH that is insured. Unlike PPI, the application form has many health questions which if answered truthfully ensure that the plan will pay-out should the claimant be unable to work. It is down to the insurance company to ‘accept’ or ‘reject’ the application when it is made, and by accepting it they will have pay a replacement income for the remainder of the policy term in the event of a valid claim.
As you can imagine, Permanent Health Insurance can be quite expensive, however, good advice can steer you through this very complex maze and assist you in getting the best cover for the premium paid. There are many different options with Income Protection which need to be explored & explained by an expert in the field.
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