Cricitcal illness and unemployment insurance

[anonymous-user]

[redacted]

[anonymous-user]

If you've been paying that amount for the last 14 years, you've spent over £11000 on payment protection insurance and received nothing other than piece of mind. Imagine how much less your mortgage would be now if you'd paid it off the mortgage instead.

I've never paid loan protection insurance on anything and I don't see that changing in the future, it's a mugs game and one of the banks\building societys biggest money spinners. Threaten to cancel and they'll probably offer you it for half price that's how much of a profit they make on it.

[vinnie83]

Bluequay said:

If you've been paying that amount for the last 14 years, you've spent over £11000 on payment protection insurance and received nothing other than piece of mind. Imagine how much less your mortgage would be now if you'd paid it off the mortgage instead.

I've never paid loan protection insurance on anything and I don't see that changing in the future, it's a mugs game and one of the banks\building societys biggest money spinners. Threaten to cancel and they'll probably offer you it for half price that's how much of a profit they make on it.

Absolute rubbish. They will not offer it cheaper. It's not a loan payment protection plan he has, it's a mortgage protection / accident, sickness, unemployment cover - totally different. How many people have never claimed on their car insurance, would you call it a waste? Home insurance, waste?

They will pay your mortgage payment + a small amount to cover 'associated costs'.

They will not pay what you chose to pay, so for example if your payment is actually £500, but you are chosing to pay an extra £500 in order to clear it quicker, they will not pay the extra.

If you want to see how competitive your current policy is, PM me I'll be more than happy to advise you and re-quote for you.

[anonymous-user]

vinnie83 said:

Bluequay said:

If you've been paying that amount for the last 14 years, you've spent over £11000 on payment protection insurance and received nothing other than piece of mind. Imagine how much less your mortgage would be now if you'd paid it off the mortgage instead.

I've never paid loan protection insurance on anything and I don't see that changing in the future, it's a mugs game and one of the banks\building societys biggest money spinners. Threaten to cancel and they'll probably offer you it for half price that's how much of a profit they make on it.

Absolute rubbish. They will not offer it cheaper. It's not a loan payment protection plan he has, it's a mortgage protection / accident, sickness, unemployment cover - totally different. How many people have never claimed on their car insurance, would you call it a waste? Home insurance, waste?

They will pay your mortgage payment + a small amount to cover 'associated costs'.

They will not pay what you chose to pay, so for example if your payment is actually £500, but you are chosing to pay an extra £500 in order to clear it quicker, they will not pay the extra.

If you want to see how competitive your current policy is, PM me I'll be more than happy to advise you and re-quote for you.

Yes I would call it a waste because it doesn't provide value for money. In independent investigations the banks have been known to being making upto 80% profit on these policys. And as for the fact that they wont reduce it if you threaten to cancel it is exactly what happened to a friend of mine who informed them they wanted to cancel.

I'm not suprised you are defending it as you obviously sell these policys but for most people they are a waste of money.

[Deva Link]

anonymous said:

[redacted]

I'm not saying you're wrong, but I would be utterly astonished if that's correct. Have you got that in writing?

A bunch of us got made redundant from our last company and no one was successful in making a claim.

[vinnie83]

anonymous said:

[redacted]

err - well then your payment is actually £1000, as I mentioned then is it not?

If you are paying for £1000 cover, and that is your monthly payment, then they will (subject to their own T+C's of course) pay it.

Your statement about you paying £1000 a month to clear it within next couple of years suggested you are paying over the odds to clear it quicker, which is why I said what I said. Which is still correct I should add.

If you are paying for £500 cover however, and have been paying £1000000000 for the last 500 years, then they will still only pay £500! (and yes I've exaggerated to prove a point before someone states the obvious).

[aka_kerrly]

whilst i can understand the need for people to want protection i personally hate MPPI and there are other products available that would pay out a income to help cover cost of mortgage, living expenses should anything happen to the breadwinner. Are you worried about the long term or short term effects, as you have pointed out you have only been unemployed for a short period of time over the last few years and have never been able to make a claim so wouldnt it be more worthwhile to put the premium into something that will allow you to benefit from a claim if you are ill/injured/unable to work or a product that will give you some kind of return for the investment at the end of the term ie just protect the full capital amount on the mortgage so that if something happened at least mortgage is taken care of and you can continue living off savings?

speak to a IFA!
dave

[vinnie83]

aka_kerrly said:

whilst i can understand the need for people to want protection i personally hate MPPI and there are other products available that would pay out a income to help cover cost of mortgage, living expenses should anything happen to the breadwinner. Are you worried about the long term or short term effects, as you have pointed out you have only been unemployed for a short period of time over the last few years and have never been able to make a claim so wouldnt it be more worthwhile to put the premium into something that will allow you to benefit from a claim if you are ill/injured/unable to work or a product that will give you some kind of return for the investment at the end of the term ie just protect the full capital amount on the mortgage so that if something happened at least mortgage is taken care of and you can continue living off savings?

speak to a IFA!
dave

There are indeed other, and quite often better ways of protecting an income, I did offer some advice on the subject but the OP seemed to want to prove me wrong instead of discuss it

[aka_kerrly]

vinnie83 said:

speak to a IFA!
dave

There are indeed other, and quite often better ways of protecting an income, I did offer some advice on the subject but the OP seemed to want to prove me wrong instead of discuss it

I find it is quite often the case when it comes to finance as its pone of those subjects that everyone should know a bit about but some people find it difficult to accept advice if it proves they may have been wrong in the past with some of their financial planning or lack of in too many cases. Mind you it can be difficult establishing trust and a high level of understanding over the internet.

[vinnie83]

aka_kerrly said:

vinnie83 said:

speak to a IFA!
dave

There are indeed other, and quite often better ways of protecting an income, I did offer some advice on the subject but the OP seemed to want to prove me wrong instead of discuss it

I find it is quite often the case when it comes to finance as its pone of those subjects that everyone should know a bit about but some people find it difficult to accept advice if it proves they may have been wrong in the past with some of their financial planning or lack of in too many cases. Mind you it can be difficult establishing trust and a high level of understanding over the internet.

Most people are badly advised, everybody thinks their financial planning is good, it hardly ever is. Even those very wealthy people who would like to think have everything under control, are quite often wrong.

I often find the people who cannot improve, are the ones who welcome advice without question.

[cj_eds]

For my first mortgage, I took out payment protection for unemployment. I got made redundant and as the OP, had found work twice (found a job, hated it, left, then found a 2nd job I liked) all before the unemployment cover would've kicked in. Because of that I would never ever take out unemployment cover again.

On the other hand, I had and always have had life & critical illness cover. The premiums were nowhere near what you've quoted above - closer to £30 a month for me & the missus. Last year I was diagnosed with an incurable cancer. Good bye mortgage and thank I had the critical illness cover. I've not worked a day since because of ongoing treatments, and its not measurable the relief of knowing I'm not being forced to go back to work during this time to keep a roof over our heads. Its also meant that for whatever the future holds for me, we now have a house we own and the only thing we need to work for is to pay for food, household bills etc. If we live sensibly & don't have expensive tastes (or kids!!) that pretty much means working part time and having time left to enjoy life. On the other hand, I go back to work and I'll have no mortgage still under the age of 30 so plenty of money to spend on toys and a lavish lifestyle compared to before. Financially you can't ask to be much better setup, short of winning the lottery.

You might regret paying life & critical illness cover, but if you number comes up and you need that insurance you'll be bloody thankful you have it.

[vinnie83]

cj_eds said:

For my first mortgage, I took out payment protection for unemployment. I got made redundant and as the OP, had found work twice (found a job, hated it, left, then found a 2nd job I liked) all before the unemployment cover would've kicked in. Because of that I would never ever take out unemployment cover again.

On the other hand, I had and always have had life & critical illness cover. The premiums were nowhere near what you've quoted above - closer to £30 a month for me & the missus. Last year I was diagnosed with an incurable cancer. Good bye mortgage and thank I had the critical illness cover. I've not worked a day since because of ongoing treatments, and its not measurable the relief of knowing I'm not being forced to go back to work during this time to keep a roof over our heads. Its also meant that for whatever the future holds for me, we now have a house we own and the only thing we need to work for is to pay for food, household bills etc. If we live sensibly & don't have expensive tastes (or kids!!) that pretty much means working part time and having time left to enjoy life. On the other hand, I go back to work and I'll have no mortgage still under the age of 30 so plenty of money to spend on toys and a lavish lifestyle compared to before. Financially you can't ask to be much better setup, short of winning the lottery.

You might regret paying life & critical illness cover, but if you number comes up and you need that insurance you'll be bloody thankful you have it.

All insurance is a waste of money..... untill you have a requirement to make a claim. A lot of people will spend money on insurance for years, and never claim - claiming to have wasted thousands of pounds.

Then there is the few people who unfortunately need to make a claim, and those without lose a lot more than the few thousand pounds that the person in the above scenario has lost.

I'm not the greatest fan of MPPI, but having something in place is better than having nothing. You were both fortunate enough to find work shortly after losing your jobs, so never needed to claim... but would you be so confident in current climate? maybe you would, but thousands wouldn't. Again, a wasted premium, but for those who need to make a claim a valuable one.

The biggest problem I face is that most people don't want to take advice. They get something set up, maybe by the IFA / Broker at the estate agent who sold them the house, or the bank who gave them the mortgage. Thats it. So many people keep going without reviewing or changing their protection.

I can confidently say I can better a majority of people's protection with ease. As could any good financial advisor / broker. It's disappointing to say though, that there are a lot of really bad advisors out there, past and present who just wanted to make easy money.

[aka_kerrly]

vinnie83 said:

I can confidently say I can better a majority of people's protection with ease. As could any good financial advisor / broker. It's disappointing to say though, that there are a lot of really bad advisors out there, past and present who just wanted to make easy money.

Exactly there are still 1 or 2 adviser living in the days when it was acceptable to use the policy that paid the highest amount of commission but this has changed a lot. I always remind people who see a adviser of any kind not to get baffled an lost in technical jargon, if the adviser cant explain in simple terms why you need a policy, what it will do to meet your requirements , how it works, how much it costs upfront and in the long run then DONT deal with them.

Dave

[vinnie83]

musclecarmad said:

if anyone needs help with these areas please contact me.

guaranteed premiums/waiver/free kids benefit/benefits you get through your employer/trusts/saving money should all be taken into account when 99% of the time it isn't.

the adviser does get a commission but the job is to put you in the informed position and if you don't feel value in the advice you don't have to proceed although 90% of my clients do as they have no idea about the details of protection such as total permanent disability.

also, pensions are a big area in that people don't review them or assume they have an occupational scheme when they have a gppp instead so need to reclaim the higher rate tax.

why have reviewable premiums on your protection? i know that what i'm paying now for my critical illness i'll still be paying in 20 years whereas someone with reviewable premiums could see the premiums more than double.

if you have kids make sure you have free kids cover so you can pay for medical treatment etc for them.

trusts aren't just to help save 40% inheritance tax they are vitally important for other reasons.

check your work benefits too - have you accounted for your death in service, are you paying for a 3 month deferred period on your income protection yet have 6 months full sick pay through your employer?

would your income protection payout the full amount you are covered for? it may not if your income has dropped.

if you are paying into a pension do you have waiver on it if your income protection doesn't take pension waiver into account.

if you need help contact me and i'll pop over to see you when i'm in your area as I have clients all over the UK.

i also prefer phi cover to asu cover as it is permanent so will payout for however long you are off work right up until retirement when most asu policies payout for 1 year or 2 years at most - there's not that much benefit in that!!! However, if you are seriously injured or off work for any reason such as depression phi can payout for maybe 40 years for some people and you can have it inflation proofed if you wish. just have some savings for if you are unemployed or use your credit card as this is more short term than being off sick.

unmarried people don't nominate beneficiaries on their death in service too which is another mistake.

I could go on all day with picking flaws in people's premiums and cover that they have. most don't cover what people think they do!!



Cheers

Edited by musclecarmad on Wednesday 10th March 12:06

All correct, and more.

People think that going onto moneysupermarket etc and saving a few quid on a like for like quote is worthwhile, but they're not getting the advice and experience that comes with a good advisor.

Like I said, very very few people I see cannot better their protection arrangements.

All of the above, and a lot more is true!

[vinnie83]

musclecarmad said:

are you an adviser too vinnie? you sound like you know a bit!

yes, there is so much more than meets the eye.

I deal with a lot of lawyers and more often than not they have protection that is littered with mistakes - maybe because they are too proud to ask for help? who knows, but the amount of mistakes beggars belief.

oh well, at least this is what keeps me in a job!

I am yes, and it is true that the people who most would consider in society to be 'clued up' about these things, are usually the ones who are in the biggest mess.

As you mention maybe it's because they don't like asking for help, but also maybe because (and I know a couple of advisers like this) people are afraid to give them correct advice and disagree with them. Some people find it easier to make money by re-broking what clients have - it's easy to sell something thats the same, but cheaper.

[gazd83]

I'm an advisor also and I too find that many people will just neglect reviewing what they have as often they are too reluctant to admit that they may have been mis-advised in the past etc.

With regards to protection being a rip off?! I think that's utter nonsense. We all have different demands and needs so it is only right that we can meet those needs the best possible way.

Any good, honest advisor will protect their clients based on their specific needs rather than flog whatever they can.

From a selfish point of view, clawback from insurance companies lasts a long time so if we correctly protect our clients then we shouldn't need to worry about it.

[vinnie83]

gazd83 said:

From a selfish point of view, clawback from insurance companies lasts a long time so if we correctly protect our clients then we shouldn't need to worry about it.

Very true. I make money, and gain clients by giving good protection advice, and thinking 'outside of the box' to quote a management bullsh!t phrase.

Very few advisors would go to my clients (in fact I'd like to think none) and take them from me based on advice (I can't however control changes in rates).

I've only seen a handful of clients who I couldn't improve protection for. Just goes to show how many half assed advisors there are out there.... says a lot about the industry unfortunately!

[gazd83]

With protection at present I have my hands tied somewhat as I am restricted to certain providers!!

How I long for that to change!!

[vinnie83]

gazd83 said:

With protection at present I have my hands tied somewhat as I am restricted to certain providers!!

How I long for that to change!!

Fortunately I'm whole of market so not a major problem for me...