It is surprising how much your outgoings would add up. You have to put essential outgoings first of course. These would include, mortgage, rent and any loan or credit card repayments you had to meet each month. You then have to pay out for gas, electric and put food on the table. After this, you then have all the other monthly outgoings to consider. All of them add up, often to a surprising amount each month. Choosing which to cut back on would be a nightmare.
The cheapest way to get income protection insurance is to get quotes from specialist providers. A specialist is someone who only sells payment protection cover. This means that you can be assured of getting the best quotes and the information needed to ensure that this type of policy is suitable. The quotes will greatly as will the terms and conditions so comparing both is necessary. Here you will be able to find the exclusions. Also when the policy would begin and end among other things.
There is a waiting period before the policy would kick in. This is usually between the 30th and 90th day of becoming unemployed continually. Income protection would then go on to provide the security for between 12 and 24 months depending on the provider. Some providers could backdate the policy to the first day you became unemployed.
Income protection insurance can be a valuable policy yet faith has been lost in all payment protection products. This happened when the Office of Fair Trading revealed that cover was being mis-sold in 2005. This was after a super complaint from the Citizens Advice. There followed an investigation by both the Office of Fair Trading and the Financial Services Authority (FSA). Guidelines were set out for those who sell policies to follow and some changes for the good have been seen.
One of the biggest changes will be the introduction of comparison tables by the FSA in 2008. The tables will highlight exclusions that exist in all policies and the cost of a policy. They will also help the consumer to choose which type of protection would be most suitable. Income protection insurance is just one a family of protection policies. There is also loan and mortgage protection to consider. Consumers will be able to go online and answer a series of questions relating to the individuals personal circumstances. From here, they will be able to determine which of the three payment protection policies would be the most suitable. Income protection can be valuable but only if it is the right type of policy for your personal circumstances.
Simon Burgess is Managing Director of the award-winning British Insurance, a specialist provider of income protection insurance, mortgage protection insurance and loan protection insurance.
