Income Protection Insurance Puns

My wife and I are 30 and recently had a child. My wife is self employed and I work a relatively accident prone job. We’ve each taken out an income protection insurance policy recommended by our IFA.

The policy pays out our current monthly income in the event that we become injured in such a way that prevents us from doing our specific occupations whether it be for a year or for the rest of our lives.

The premiums are around £40 per month with our annual incomes each being just a bit more than £20k.

I suppose I’m just looking for reassurance as to whether or not this was a good idea (I know that’s a very subjective question) from people who probably have a good finger on the pulse of these types of things. Does anyone on this sub have any experience with these of policies? Are they considered a waste of time?

Edit: Thanks very much for all the replies, they’ve been incredibly insightful, helpful and made me feel more reassured about the policy as a whole.

Got a good raise with the new job (they do not offer any coverage, the previous one was Vitality, but I never claimed and I think they're extortionate, like £100/month). So I thought I'll sort the insurance things myself.

What insurances I should be looking into?

- newly married

- barely under 40

- no kids

- no mortgage for now, but probs in 2 years

- no car

As title says - I have income Insurance which covers illness/disability. I'm a nurse, so can't see myself not having work due to being laid off, etc (I'm good at my job).

Do you still think I should have an emergency fund?

I'm in Australia, if that makes any difference.

Thanks!

With Covid, I've had a few business scares because of clients having some finacial issues. The last thing I want to do is find myself in a position, despite how hard I work, not being able to pay bills.

Is there any ideal income protection insurers that can help with this specific type of scenario for someone who is self-employed? Please slot down some recommendations.

It'd also be interesting to hear what insurance's overall that people recommend getting. To help with that, regarding context in my job & position:

I'm self-employed and am registered as a sole trader in the United Kingdom.
I am the only one in my business, so no need to employee insurance.
I work from home, online. Business is Virtual Assistance & Communications Marketing Agency.
I already have Professional Indemnity Insurance (which, due to travels and clients, will soon be updated to global coverage).

I'm just also not quite sure what else I should consider at this point. Especially now as my business is growing more.

If there's also a better place to post this, please let me know! :)

I recently started a new role that came without those three (health, life, and income protection) insurances as taxable benefits.

Debating the mix of the three - probably don't need life seeing as I am not supporting anyone. Health makes a lot of sense of course and now just working out the level of cover, and income protection seems sensible but tough to decide on cover length + terms.

What mix do you have, and who with? Hearing lots of negativity around Vitality... Aviva seem a safe bet?

Or, scrap the lot and put the savings into an emergency fund?

Hi everyone! Have been quoted 250 a month to pay off mortgage if either myself or wife die, 100k wife critical illness 1-time pay out and a v generous monthly income if I get a critical illness.

Edit for claarity: here is the breakdown of cost and cover, Joint Decreasing Life Assurance £350,000 =£38 Joint Level Life Assurance £250,000 =£31 Income Protection of £3,750 (me) =£103 Critical Illness Cover £100,000 (wife) = £77 Total: £251.03

Normally I ignore these types of insurance, but now have a two year old, and wife not working atm. We're around 40, barely drink, don't smoke, healthy minus not enough sleep.

Question is, are these products worth it? We could probably afford it, but it does eat into disposable income. These policies don't go into a pension type thing either, so if I pay for 20 years say, the moment I stop, the cover goes.

Sorry same person who asked the work cover question- not what I meant! I meant income protection.

Has anyone been through income protection insurance - mental health?

Has anyone been through the work cover tpd process for mental health?

My mental health has always been a problem but it gets worse due to work pressure etc. I expect that I will face some consequences for this and how my work is affected. My mental health really won’t cope I have already had to have time off for this. I am considering the income protection process if worst comes to worst ( I hope it doesn’t). Has anyone been through the process?

Helping my dad with his incompe protection claim through Australian Super.. is it meant to be this difficult? I have been sending forms back and forth and waiting up to 21 days for a genuine response from the claims officer, despite an initial agreement that he would check in every 10 days.

Hi UKPersonalFinance

Long time lurker here.

Just doing my first remortgage before the rates go up, and being offered all sorts of insurance by the broker. It's quite easy to get spooked into taking it, and I appreciate it's all about risk appetite, but how important is taking out these products?

When I first took a mortgage 2 years ago I just went with a standard decreasing life insurance. But now these guys are making it sound like I should really have critical illness and income protection, but quotes are coming in over £100 a month.

I have no reason to expect me or my partner to get sick in the near future, though of course you never know. Is it commonplace for people to pay this kind of money or is this insurance companies preying on fear? If something happened we would probably just sell our house and take the equity to live somewhere cheaper (currently in London)

Hey all I’m out here sharing my experience. I’m currently off work after breaking my neck. I think I’ll be ok in the long run but I am so pleased to have the support of income protection insurance in the meantime.

With the insurance, my mortgage is being paid and I can still buy my monthly etfs while I recover.

In my opinion the insurance is cheap for the peace of mind it provides.

My cover is mlc level cover outside of super. The policy was provided by a financial advisor. From what I understand it’s easier to claim if outside of super.

If you don’t have income protection insurance. Go and get some.

anyone here familiar with pricing credit insurance or income / disability insurance? Loss ratios for these are well below average according to the NAIC when compared to P&C industry so wanted to get people's take on how that may change with companies like Affirm and other buy-now-pay-later companies which technically promote people taking on more debt (i.e., more debt -> more risk)

So am trying to adult and update my life insurance, trauma cover, and income protection because our circumstances have changed recently. In conjunction to that, I have also followed recent mental health awareness guidelines and sought treatment for some issues in recent years (moderate depression and anxiety). I also have occasional migraines. I am now being turned down for additional income protection as my salary has gone up, because of my mental health and migraines. I have been off any medication for 2 years now for my depression, and migraines are just a way of life for a lot of people, we learn to live around them. I'm so pissed off that in trying to do what is best for my health, and making sure I can fully participate in employment and society, I am losing out on the protection that insurance can provide me! No wonder people lie through their teeth in their applications, it just does not pay to be honest or seek treatment!

I am pushing back on the decision with the argument I have been off medication and treatment for over 2 years, we shall see what joy I get. There just seems to be a huge disconnect between the amazing work to raise awareness of mental health, destigmatise it, encourage people to reach out for help, and then penalise people for doing so.

So due to the recent changes for income protection coming up I decided to get some.

I called up an reputable insurance group, ran through all the questions (income, lifestyle, personal details etc) and then got to the question of where I work.

I run my business from home and is very computer/telephone based with minimal travel from home. I basically just work out of a spare room of the house.

Straight away the insurer said he had to check with his underwriter. He came back about 5 minutes later and said I’m ineligible based on the amount of work I’m doing from home with no separate place of business/workplace…

Is this normal?

Surely there are a lot of businesses these days run from home that isn’t a seperate dwelling (consultants, developers etc)? I can’t seem to understand the logic behind the ineligibility. The business makes good, stable income and has been running for years.

I'm changing Super from Media Super to Australian Super. I opted Australian Super because my brother recommended it based on his analysis. Upon signing up now, they give the option of these Insurances covers (TPD; Life; Income Protection) - My question is, are these insurance covers relevant to opt in or out?

What Super are you in? Why?
And did you opt in/out for these insurance covers?

I want to utilize my super with lowest fees, and my brother has recommended to opt for High Growth for the investment.

Personally I am only earning <45k per annum, and I spend $200 per month for private hospital cover (as its covers monthly therapy sessions for me) which is taking a lot out of my pocket, Previously I have opted out of these insurance covers, but looking forward - I'm checking if I should?

I noted that if I opt out now, that if I wanted cover in the future, I would have to provide my health details etc. of which I wonder if it will be a hassle or non-guarantee.

Thank you!

I've seen a few articles in places mentioning how income protection is changing. I've considered income protection insurance, and it was on my list of things to talk to a financial planner about when I see one in about 2 months (first appointment). But the changes will come into effect in a couple of weeks, before I get a chance to discuss it.

Can anyone summarize the changes that are happening - will it really make any difference if I take out a policy now, versus in 6 months? Highest Tax bracket, if that makes any difference.

I'm quite capable of working out what my ongoing expenses are, mortgage payments, commitments etc - I just wanted to discuss it with a professional, and see if they can get me any better deals than I can do myself.

Just hoping to get some general opinions about it - I know that you lot are not my financial advisors!

(FWIW I'm 46M, married with a four-year old, $180k per year combined income with my wife (both in perm jobs), own PPOR with a mortgage.)

I'm doing an EOFY review of finances and realised/remembered I'm paying about $290 a month for a policy handled by my Super provider. I get an annual statement confirming how much of that I can claim back as a tax deduction (around 76%).

Up until this time last year this was basically cost-neutral for me because my tax deductions were sufficient to bring my total income (which was in $90k range) down to the lower tax bracket, hence a big tax return.

But now, with the new tax brackets and a slightly higher income ($105k), my tax return will never be more than 32.5% of my total deductions, since I'll never have enough deductions to go to the lower bracket. So now it's actually costing me $290 a month, minus the small amount I can deduct.

A few quick searches on iSelect and Canstar indicate I could probably save $100-150 a month to get roughly the same cover from the likes of Noble Oak or Zurich, but I haven't (yet) done a detailed comparison of what I'm currently paying for vs. what they provide.

So my decision right now is actually whether I should can the current policy altogether and use the $290 a month for something else; or talk to the provider about adjusting the premium in some way; or cancel and go elsewhere.

So, questions:

• Generally, what are r/AusFinance's feelings about Income Protection Insurance?
• Is it a total waste of money; a necessary evil; best thing since sliced bread...?
• Any guidance or pearls of wisdom about how I can make a decision? (Again, I know You Are Not My Financial Advisor)
• Specifically, for anyone who's had experience trying to claim it - did it pay out? Or are there so many sneaky exclusions and provisos that it's a lost cause...?

I'm a freelance dev earning £80K-£100k, married with a young child and a significant mortgage on a house we bought a few years ago. Being freelance means my income fluctuates more than average, a situation a lot of you know first hand I'm sure. But I've been very lucky during the pandemic as it hasn't seemed to have had much of an effect on my work and I'm generally pretty happy with my finances.
Saying all of that, Covid has made me consider my mortality and the responsibilities I have. You'd think that would've been the case when my son was born, but I still thought I was an immortal superhero! I didn't even bother taking life insurance when we bought our home.
Which leads me to my question. I'm concerned that if something horrendous happens to me I won't be able to work for some time or at all. I have emergency funds, some savings and tiny investments, but not sure if it is enough. I earn considerably more than my OH.

I'm wondering whether I'd be better off with income protection or life insurance? Any opinions or people in a similar boat?

Hello!

I’m just about to rent my own place and after speaking to the estate agents they started to have a conversation with my about income protection insurance.

I don’t see myself losing my job any time soon but I’m just curious if this is actually worth it?

Currently on £18.5K a year with no savings.

Hi all financiries,

I would like to hear your thoughts on the insurances used in the title of this topic? I'm paying $90 a fortnight for this insurances, it's purely for 'just in case situation'. I was wondering if investing this money can be more of a benefit? I know it's a security matter that can be beneficial in unplanned scenarios but paying for it more than a year already really hurts to calculate the money I basically invested for peice of mind...

Cheerio and stay safe

Hi All

Earlier this week I was working on site in the west midlands and tripped over on some old fencing that was hidden in some long grass, this resulted in me tearing my foot/ankle ligament. I had to attend hospital and currently on crutches, unable to stand for long periods, can't walk properly etc. Obviously this type of injury takes a good few weeks/ potentially months to heal correctly.

I have a few concerns and not sure how to proceed, apologies if its a bit of a ramble/mess , I tried formatting it to the best of my ability :

• My employer has recorded the accident but have yet to report this via RIDDOR.
• My employer has offered me light duties (office work) and want me to start next week. Are they trying to avoid reporting my injury by trying to get me back ASAP?
• I'm worried that by going back on light duties in the office it will hinder the healing of my ligament/ ankle. A family member had ligament damage and it has never healed properly. Where do I stand then if it gets worse, doesn't heal correctly after going back on light duties? Which leads me onto the next point:
• I don't get any sick pay, it would just be SSP however I have an income protection policy that would cover 60% of my wage with a deferred period of 1 month. This would mean I would not be able to do any light duties (as its paid employment) but I assume give my ankle/ ligament better chance of healing. I mentioned this to my employer and they were quite dismissive and trying to dissuade me from taking this option.
• If I don't claim on the insurance I would still have to declare the injury to them wouldn't I as this could affect any other claims in the future?
• I don't have a doctors note currently, during the hospital visit I was x-rayed and dealt with by the nurses. I guess I need to contact my local GP about this? Should I have this before returning on light duties?

Any advice would be greatly appreciated, thanks.

Just got a letter in the mail from BT telling me my policy will increase premiums by 70%!

I am on a agreed endorsed value policy which I understand is a good policy since the recent reforms which has watered down these policies.

But this recent hike just has me disillusioned with the whole industry and product. I am paying a Level premium which means I need to stay loyal to one provider for like 30 years + which in it of itself may have been a stupid idea to begin with (how do I even know if the underwriter will be around in 30 years time?)

On the other hand I was told a stepped premium would end up being prohibitively expensive in my later working years (when I may need the insurance the most), whereas the level premium would be cheaper over the long run.

I feel some degree of IP insurance is prudent, but a 70% premium hike just makes me feel like the industry is broken. It looks like the premium increase is likely to be across the industry.

There has to be some disruption or new products invented over the next 30 years that makes my level premium policy feel like way too much commitment, and I'm better off just shopping around for a cheaper policy, albeit losing my agreed endorsed value benefit.

I don't know what to do!

EDIT: Thanks for the all the replies guys, lots to think about...

I've started my electrical apprenticeship and the apprentice support team recommended I look into getting income protection insurance. I shopped around for a quote and found the most appropriate for me was $80/month for them to cover 75% of my income (about $3000/month) in the event of injury or sickness where I can't work for a benefit period of 2 years. There's a no-claim waiting period of 3 months so I won't be covered for that initial period.

More info: I get paid $22.50/hr and get 2 weeks paid sick/carers leave annually as well as 2 weeks paid holidays and 1 paid RDO/month (which accrues if I opt not to take it). I work 5 days a week 40hrs and paid OT at time and a half for the first 2 hours and double time every hour after. OT is relatively frequent so there's ample opportunity for me to save for an emergency/ time off. I just can't calculate whether it is more worthwhile for me to save my own money for an emergency or pay for the insurance. I've never had any sort of injury so it would mostly to cover me if I injured myself anywhere other than work (work cover would pay me full wage if I'm injured at work).

Does anyone have an advice or experience to weigh in and help me make this decision?

Thanks in advance!

Basically I have the insurances within my super, but my new workplace supplies this at no cost the comparisons are below:

Current - Payed from super Life/tpd is 5-6 times my salary Income protection 75% of my salary for 2 years

New - No cost, it's supplied by work life/tpd is 3 times my salary (but can increase sum at a cost) Income protection is 75% of my salary till 65 years old

Obviously looks like the work supplied one is a no brainer, but what should I consider when transferring or cancelling the old one?

Thanks!

Hi all,

I thought it might be a good idea to review the situation with the changes coming to Income Protection policies. You may recall a previous post that I wrote on the first round of changes that came in on 31st March, 2020 (https://www.reddit.com/r/AusFinance/comments/eotrgv/psa_if_you_are_considering_getting_income/). Well, the new round of changes are just around the corner and these are the big ones.

Some context:

In December 2019, the Australian Prudential Regulation Authority (APRA) handed down parameters to ensure sustainable pricing on retail Income Protection policies (those generally available through an adviser - not superannuation policies or general IP policies such as those available through your health or car insurer). APRA’s job is to ensure that premiums remain as stable as possible to avoid participants exiting the market – both policy holders and insurers – and to ensure insurers remain profitable. In the 12 months to June 2020 Australian insurers lost $1.3 billion on Income Protection cover.

As much as you may not agree, if insurers don’t remain profitable then they exit the market either by takeover or spectacular demise. This is not ideal because policy holders would be screwed and we could end up in a monopoly situation, amongst other things. Insurers collapsing and/or forced sale is not a good thing.

This is going to be a long one as I’m going to summarise each of the new changes. Before we get started:

1. I don’t have all the answers, I’ll help where I can but as you’ll see from the below some key definitions haven’t been settled on yet.
2. Full disclosure: I am a specialist insurance adviser. I’m not trying to get you to take out Income Protection or any other cover, I’m not trying to get you to become a client of mine, I don’t want anything from you. What I want is for Australians to have access to education and info that may be relevant to their experience with insurance, being my knowledge area for more than 15 years.
3. General advice warning: This information might contain unsolicited general information only, without regard to any person’s individual objectives, financial situation or needs. It is not specific advice and is not intended to be relied upon by any person. Before making any decision about the information provided, you should consider the appropriateness of the information in this article, having regard to your objectives, financial situation and needs and consult their adviser.
4. Official APRA rel

Hi wonderful FI community,

I’ve recently secured a property and am exploring options regarding income protection. My Financial Advisor has strongly suggested taking out Insurance for this but I like the idea of using my Super.

Does anyone have any advice or thoughts on this?

Thank you in advance 🙏🏻

Hi all,

I like to think I'm fairly financially stable (for my current situation anyway), but one area where I'm lacking is insurance. I'm not married or have kids, just living with my girlfriend in a rented property - so no mortgage either - and I'm wondering whether income protection is worth it. Obviously, with all insurance, you don't need it until you do, so I'm not 100% against it.

If I cut down on any frivolous spending (take outs, Netflix, buying tat etc) my current emergency fund could last me around 7~8 months - so I'm fairly comfortable in that regard (compared to most, anyway). I'm also in a very stable job, although I see most providers on comparison sites don't cover job loss at the moment anyway, so a bit of a moot point. However, the employer's sick pay isn't amazing - I'd imagine I'd get a maximum of a month's sick pay before stat if I was to become potentially long term sick.

Rambling aside, what's the UKPF opinion on income protection, specifically accident & sickness? The cheapest cover I can find on MoneySuperMarket (and Meerkat) is Holloway for just £5.62 a month - this would pay out £1200 a month for up to 2 years, after a 3 month grace period. £1200 would be more than enough I'd imagine (especially if I cut down on putting in to LISA etc.), and although I could extend to 6 months grace the difference would be 50p a month, so I'd take that bet.

Has anyone used Holloway? I like saving money, but I always wonder if the cheapest insurers are the cheapest for a reason, especially as the next is Aviva for 40% more each month for only 1 years coverage. £5 a month feels like an amount that you'd never forgive yourself for 'saving' if I was to become critically ill, but in that case you could say the same amount almost any amount, and I wondered if there were any catches.

How many of you have an income protection policy in place, to try and safe guard FIRE?

Life insurance to cover dependents is generally pretty cheap if you have no health issues, but income protection insurance is relatively expensive and it seems few people have it. The change in quality of life if you have a long term sickness (say 2 years +) is pretty overwhelming, and can be a nightmare even if you have critical illness cover as it may not pay out for what is making you ill.

Crunching some numbers, it seems like one can insurance against such things by sacrificing only a marginal reduction in the FIRE date. Say you give up 3 months of retiring early but you get income protection from age 25 to 50 etc. I get that if you are struggling to make ends meet then insurance is a long way down the priority list, but if it’s just a case of insurance vs working for an extra few months then I am surprised more people don’t have it. When people run through expenditure on here I don’t see it factored in. Or really many questions about it in general.

I just bought a home and work as a self employed freelancer earning £70K+ per year. Everything is going great and I’m generally happy with my finances.
I am just concerned that with what’s going on right now, there are possibilities that I get sick and won’t be able to work for some time. I have emergency funds but not sure if it is enough. I’m in my early thirties and in good health.

I’m wondering whether I’d be better off with income protection or life insurance? Is there any consultation that you guys can recommend?

Is it worth having income protection insurance when getting a mortgage? I understand and have traditionally heard about life insurance and even critical illness cover but to be clear this product offers to pay my salary if I am unable to work in my profession (doctor) due to illness. It is not particularly cheap. My previous experience with a similar product was it being pushed to medical students in a predatory-seeming way. Critical illness cover would cover/go towards covering my mortgage and this feels excessive? My feeling is that if was ill enough to need this but not dead, I’d probably have lower expenses and wouldn’t need my current salary. I spoke to a family friend who has a household income >200k and they didn’t get it (but do have critical illness cover). Does anyone have any experience/recommendations?

Hi all,

I'm a specialist Insurance Adviser and one question I’m often asked is “what’s the difference between TPD and Trauma cover” so I thought I’d put it out there for general education. To really understand we need to bring Income Protection into it as all three are types of disability cover.

What is Income Protection?

• Income protection replaces your income in the event you cannot work due to any sickness, accident or injury.
• It pays you monthly directly into your bank account to replicate the income you would receive from your pay.
• Enables you to manage your everyday costs of living that will continue to occur regardless of your sickness, accident or injury – your rent/mortgage, food, bills, school fees etc.

What is Total and Permanent Disability cover?

TPD cover is claimed in the event you are totally and permanently disabled to an extent that you’ll never be able to work ever again. If you claim on this policy, it’s a medically severe situation and a bit “end game” because the insurance company and your doctors have agreed you are unlikely to work ever again. TPD cover:

• is payable as a lump sum amount of cover.
• Because it means you’re unlikely to ever work again (aka earn income) we need to ensure that you have access to a large amount of cash quickly to set yourself up for the rest of your changed life.
• You can use the proceeds from a TPD claim for whatever you want. Let’s say you had a car accident and you are now a quadriplegic. It is likely you would use the money to repay debt on your home, modify your home for your changed lifestyle needs or purchase a home to cater to your changed lifestyle needs, as well as pay for other costs associated with your changed lifestyle needs.

What is Trauma cover?

This policy exists to plug the financial gap that may exist between income protection and TPD cover. Trauma cover basically says “okay, wow, you’ve been diagnosed with something really bad like cancer, heart attack or stroke, but that’s not necessarily a death sentence and it doesn’t necessarily mean that you’re going to be out of the game forever (TPD) but it is going to knock you about for a couple of years. So, take this money and use it to recover”. Trauma cover:

• is payable as a lump sum
• is the only type of disability cover that is pre-defined by a specific list of approximately 60 medical conditions.
• As soon as you’re diagnosed with a listed condition, have the formal results and meet the definition

I am currently buying a house on my own and have had my mortgage (133.5k) approved subject to searches. I have been advised to get life insurance and income protection insurance by the broker. After speaking to a mortgage advisor (from the same company) my decreasing life insurance premium will be £20/month till the mortgage is paid offband income protection £35/month till I'm 70. Would this be wise?

I made a throwaway just because I didn’t want to link all my finances to my personal account.

My husband and I are about to buy our first house and we need insurance but I’m getting so confused at to what it worthwhile and what the broker is unnecessarily trying to sell me.
I’ve been quoted ~£30 for income protection for my income (I earn enough to cover mortgage payments and bills but husband doesn’t) plus ~£70 for mortgage decreasing life insurance with critical illness extra for both of us. We’re both in our late 20s and have one kid with another on the way. We’re both healthy at present and I’m stingy as hell with money so despite the fact that we will initially have less savings because of the house deposit we do always have a rainy day fund. I work for the NHS so if I die he would get a small lump sum and I have a years sick pay covered by work (which is factored in to my income protection).

Is it normal to have to pay ~£100/month on all this insurance? Do we even need all that cover?

Thanks in advance for any help!:)

I could be completely misunderstanding what income protection insurance does so I could be very wrong.

Any recommendations?

Have thought of getting these on my own as I have non of these from my super.

Any suggestions are welcome.