There are many reasons why if you are thinking of protecting your income you should choose a standalone specialist to purchase your cover. The first is that you will get the cheapest cover possible and the second you will get all the information needed to make sure that a policy is suitable for your circumstances. Income protection insurance isn’t suitable for all individuals and if you don’t read the small print then you cannot make sure it’s suitable for yours.
Income protection insurance is taken out to protect your income up to a certain amount each month to give you a replacement income if you were to come out of work after suffering from an illness, accident or if you should be made unemployed. The cover would begin to give you a tax free income after you have been out of work for anything between the 31st day and the 90th day depending on the provider and would then continue to pay you an income for between 12 and 24 months. The income ensures that you would be able to continue in the lifestyle you are accustomed by allowing you to carry on paying the essential outgoings each month without the worry of were you would get the money from.
It is essential to realise that there are exclusions in all policies and it is these that could mean income protection insurance might not be suitable for your needs. Some of the exclusions which are common to all policies include if you are only in part time work, are of retirement age, self-employed or if you have an ongoing illness at the time of taking out the policy. Of course these are just some of the most common and could differ from provider to provider, so it is essential that you are given the information and key facts within a policy before taking it out, the exclusions are usually hidden in the small print but an ethical specialist should make these available.
The lack of information regarding policies at the time of taking them out was one of the main causes of mis-selling when in 2005 the Financial Services Authority began an investigation into the sector and several high street names were handed fines. While changes have been made for the better in the way that the cover is sold many more still need to occur and the cover is still confusing to the majority of consumers who are unaware of how much the total cover costs, aren’t aware of the exclusions in a policy and don’t realise they can shop around for cover with a standalone specialist.
In March 2008 the Financial Services Authority are introducing comparison tables which it is hoped will make the sector more transparent. Consumers will be able to answer a series of questions and from here they will be able to determine which cover is the most suitable for their needs while also being made aware of the exclusions which exist in all policies and the amount the cover will cost in total.
A standalone specialist is the best and cheapest way to buy a quality income protection insurance product that will give you a replacement income if you should lose your own but only if you understand the product and what it can and cannot do.