Income Protection Insurance

[DiscoStu]

I decided that as someone fairly new contracting without a huge pot of cash to fall back on, it would probably be a good idea to get some kind of income protection insurance in case anything bad happens (I'm thinking in terms of health problems as opposed to being stuck on the bench for a few of months).

Does anyone have this? Who did you get it from? Any recommendations?

TIA

[51st State]

I decided that as someone fairly new contracting without a huge pot of cash to fall back on, it would probably be a good idea to get some kind of income protection insurance in case anything bad happens (I'm thinking in terms of health problems as opposed to being stuck on the bench for a few of months).

Does anyone have this? Who did you get it from? Any recommendations?

TIA

I got mine through my FA. The company is called UNUM (not a name I'd heard before - obviously pay my FA good commission!) and it worked out at about £2 for every £100 insured income, which the company pays for me.

[Cheshire Cat]

If you decide to do this, check if the insurance pays out immediately or whether there is a "lag", which I understand is common.
If your motivation for paying for this insurance is to avoid cash-flow problems of being out of work, then no point in paying for a policy that pays out only x days after you make a claim, or x days after you've been unemployed, by then all your bills might have been missed and you'll be in the sh!t.

[TheFaQQer]

I got mine through my FA. The company is called UNUM (not a name I'd heard before - obviously pay my FA good commission!) and it worked out at about £2 for every £100 insured income, which the company pays for me.

Is that then declared as a BIK on your P11D?

[GreenerGrass]

I decided that as someone fairly new contracting without a huge pot of cash to fall back on, it would probably be a good idea to get some kind of income protection insurance in case anything bad happens (I'm thinking in terms of health problems as opposed to being stuck on the bench for a few of months).

Does anyone have this? Who did you get it from? Any recommendations?

TIA

I'm using Dentists and General, the good bits, if you catch the flu and it lasts a week or more then the policy has paid for itself. The downside, it only applies while you are in a contract (so 6 months max for most people - if you're going to break a limb do it early in your contract ). Also it doesn't cover any previous conditions.

It seems worthwhile for your first 2 or 3 years contracting while you are building up your emergency/bench fund.

http://www.dengen.co.uk/

[51st State]

Is that then declared as a BIK on your P11D?

No, - my FA and accountant both agree that as it won't actually be a benefit until the policy pays out, then there's no BIK.

There will of course be a tax liability if the policy does pay out.

[AlfredJPruffock]

I'm using Dentists and General, the good bits, if you catch the flu and it lasts a week or more then the policy has paid for itself. The downside, it only applies while you are in a contract (so 6 months max for most people - if you're going to break a limb do it early in your contract ). Also it doesn't cover any previous conditions.

It seems worthwhile for your first 2 or 3 years contracting while you are building up your emergency/bench fund.

http://www.dengen.co.uk/

Good scheme - however for the ex-pats Nota Bena

AM I COVERED WHEN WORKING ABROAD?

Sickness benefit is not normally paid whilst members are abroad. If you join whilst employed in the UK and subsequently work within the European Union, you will be eligible for benefit.

[tim123]

If you decide to do this, check if the insurance pays out immediately or whether there is a "lag", which I understand is common.
If your motivation for paying for this insurance is to avoid cash-flow problems of being out of work, then no point in paying for a policy that pays out only x days after you make a claim, or x days after you've been unemployed, by then all your bills might have been missed and you'll be in the sh!t.

Whether there is a 'lag' is not based upon how long they decide to take to pay you, but on how long you have to be ill before you qualify.

Quite clearly, someone with a one day policy will make make many more claims that someone with a 4, 8 or 13 week policy. Consequently, a one day policy will be much much more expensive, almost to the point of it being unaffordable.

IMHO, anyone who doesn't have the means to fund their necessary outgoings for at least 4 weeks (and preferably 13) does not have enough flexibility to even consider becoming a contractor.

HTH

tim

[KevinS]

I have Income Protection from Scot Equitable - 8 week lag (I have enough put away to cover the 8 weeks), pays me enough to cover the bills..

[Dow Jones]

Income Protection

I'm using Dentists and General, the good bits, if you catch the flu and it lasts a week or more then the policy has paid for itself. The downside, it only applies while you are in a contract (so 6 months max for most people - if you're going to break a limb do it early in your contract ). Also it doesn't cover any previous conditions.

It seems worthwhile for your first 2 or 3 years contracting while you are building up your emergency/bench fund.

http://www.dengen.co.uk/

This one is a mutual, so no fat cats to feed and it's unique among policies, ie paying from Day 1 - however, it has now become so expensive, it's almost prohibitive. Most other policies kick off after 2/3 m, not worth it really.
I have had it now for over 10 yrs, but when I recently wanted to extend the cover, it came up as 3x more for a 1.5x increase, so obviously aware of their niche market.