Reply to: Insurance...do I need it?!

[Swiss Tony]

Whilst perhaps it is not life threatening it is certainly a large financial outlay.

Consider the costs of changing your home to make it more suitable, the cost of the latest drugs and the cost of having someone look after you full time, unless you already have enough in the bank to cover that for the remainder of your life. It soon adds up.

Plus if I was diagnosed I would like the ability to plan out the reminder of my life whilst I’m still all there, rather than worry about the financial security of my family once I become a liability.

[robnjc]

I'd say get professional indemnity insurance at least. If you don't need much (e.g. £250,000 or even £100,000) it will only cost a couple of hundred quid.

robnjc,
Do you know which provider your friend got his Critical Illness cover from? That insurance is notorious for refusing to pay out, so it would be good to know of a firm that has done.

I think it wsa actually offered through his mortgage supplier - though to be fair they have not paid out yet either....I think he was just surprised that Parkinson's was on there - not wishing to belittle the effects of the disease but its not exactly life threatening.

[gadgetman]

I've managed to avoid forking out so far but for my latest contract (starting Monday) the client has insisted on £1m PI insurance and wants to see the certificate.

After a bit of searching around I got an all-in-one £2M Public Liability, £1M Professional Indemnity, £10M Employers Liability. Cost is £390 via one of the quotes at http://www.betterbusiness.co.uk/ as recommened in a thread on this site.

[Swiss Tony]

A proper IFA, or one of the "was working for Everest before I got into this lark" types?

Less of it!

Nope went direct into the IFA scenario from Uni. Started as a trainee whilst I did all the relevant exams (and a bunch of irrelevant ones as well!), made cups of tea the usual.

Have been acting as an Independent Advisor with all bells and whistles for almost two years now (4 years spent doing the ground work and working up ye old cooperate ladder)

[Bagpuss]

lol NO

Financial Consultant / IFA

It is usually part of a clients Financial Security, all good and well going forward but you need to be protected if things go tits up.

A proper IFA, or one of the "was working for Everest before I got into this lark" types?

[Swiss Tony]

lol NO

Financial Consultant / IFA

It is usually part of a clients Financial Security, all good and well going forward but you need to be protected if things go tits up.

[Bagpuss]

"the ones we recommend"

Insurance salesman?

[Swiss Tony]

I see your confusion Chef, though your income would be rather low (assuming that you are set up as a limited company) you would still be getting dividends etc. I choose to use your annual figure, based on estimates if needed, of everything rather than your ‘basic’.

Though It may be the case that the online or phone staff are unable to do it, so you may need to do it via an IFA. Similar situation if you wanted anything above a stakeholder pension; you may have to be advised as to which insurance suits your needs best, hence assessed on your situation, rather than direct offer.

I agree with you Bagpuss, the majority of CIC contracts are not worth the paper they are written on. Its why we spend allot of time making sure the ones we do recommend are actually going to pay out rather than “well you still have one leg sorry”. The main reason for the better ones not paying out is that the applicant has ‘lied’ or embellished the truth on application.

Law states that it must be 100% true on application, if it is found out that the client did lie about a condition ie cancer and they said they were not a smoker it would be void. Having said that friends Provident do still pay out an amount if the client has not told the truth.

They are making it more harder to claim (they changed the goal posts a few months back) as one in three people will get a Critical Illness of some description. Way back when they first started this cover they did not expect such a high rate of claims.

[Bagpuss]

I thought CIC was a bit of a con, i.e so many caveats they almost never pay out?

[Swiss Tony]

The majority of my clients are contractors and all of them that have wanted CIC are covered through BUPA.

As your talking about Income Protection Friends Provident are ahead of the game at present, in fact it’s a toss up between Friends Provident and AXA with income Protection, though I would say Friends Prov are head and shoulders above AXA.

[chef]

BUPA dont cover contractors though do they?

"If you are in paid work earning up to £50,000 a year, you can receive the benefits of your cover or 50 percent of your "pre-incapacity earnings", whichever is the lower"
from Bupa.co.uk > Lifestyle & Income Protection > How much will i get?

[Swiss Tony]

Best CIC on the market as it stands today is a toss up between BUPA and Friends Provident. BUPA is just ahead due to their policy of Best Doctors. I have guys who do shed loads of diligence for me so I know what I’m on about!

No I don’t work for either of them!

[thunderlizard]

I'd say get professional indemnity insurance at least. If you don't need much (e.g. £250,000 or even £100,000) it will only cost a couple of hundred quid.

robnjc,
Do you know which provider your friend got his Critical Illness cover from? That insurance is notorious for refusing to pay out, so it would be good to know of a firm that has done.

[robnjc]

The short answer is YES.

Critical Illness. A friend has just been diagnosed with Parkinsons - he's well under 50 but is covered under his policy. It'll pay off his mortgage and provide a five figure lump sum. When he can't work any longer his Income Replacement kicks in.

Income replacement in case of sickness/disability - can be expensive but cost comes down
1) dependent on income required (you probably wont need as much as you do when working)
2) the longer you choose to defer benefits - i.e how long can you afford to be sick before you need to replace income. Mines at 6 months.
Make sure its for your specified occupation not a "suitable" or "any" occupation otherwise the insurer will refuse to pay up if you can still stack shelves.

Lots of others out there - PHI is a personal choice - do you leave yourself in the hands of the NHS? Life Assurance depends on your dependents & commitments.

Last word of advice - ask around for a reputable independent advisor before buying and ask them.

[rootsnall]

It may be specified in your contract that you need it. Possibly if it came to dispute they could ask to see if you maintained £x PLI etc and use that as an excuse to terminate etc.

My contract specifies I must have it, I spent 6 weeks trying to get the clause removed without success but verbally have been told they won't check up anyway. On 1 weeks notice it's not worth getting on it on fear of termination.