Income Protection Insurance Advice

Need Income Protection advice? Learn the benefits of getting advice from a consultant and traps to watch out for.

It’s easy to feel overwhelmed when looking for income protection. With so many insurers and policies to choose from, and so much technical jargon to wrap your head around, it’s enough to put some people off from trying to find cover in the first place.

If you’re looking for advice on finding the right income protection policy for your needs, an experienced insurance adviser can help. Advisers have an in-depth understanding of what sort of cover is provided by income protection insurance and the range of policies available. They are experts at taking the time to assess and understand your specific insurance needs and then comparing the options on offer to find something suitable.

In short, using the services of an insurance adviser allows you to make an informed choice when it comes to income protection cover, saving you time and money.

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How can income protection cover be purchased?

Retail income protection insurance may be purchased in a number of ways. Generally cover can be;

  • Purchased through a financial adviser. This is considered as one of the most viable ways to purchase Income Protection because you will be able to get a professional advice, which will result in perfectly meeting your needs. This is a good option for people that are not sure what they require in a policy and are looking to receive tailored cover.
  • Purchase directly from an insurance provider. This option allows you to purchase cover directly from the insurer as oppose to applying through an insurance consultant. The advantage of this method is you will get the insurance policy quickly as there is usually very little or no medical underwriting required.

What are the key benefits of receiving advice from an insurance adviser?

  • Save time. Comparing income protection policies across the market and finding one that matches all your needs takes time. Enlisting an insurance broker to help you find the right policy minimises the time and stress you will have to endure when selecting a policy.
  • Save money. If you don’t understand the ins and outs of income protection insurance and how it works, you may end up paying too much for cover. Insurance brokers give you the expert advice and assistance you need to find an affordable policy that’s tailored to your situation.
  • Get more choice. If you decide to look for cover on your own, you probably won’t be able to find the time to research all the available income protection policies. Thankfully, insurance brokers have access to a wide range of insurance companies and can sift through what’s on offer to help you find something suitable.
  • Understand the jargon. The terms, conditions and other fine print included in an income protection insurance product disclosure statement can all be incredibly confusing. A good broker can help you make sense of all the technical jargon insurers use and answer any questions you may have.
  • One point of contact. Instead of dealing with multiple insurance companies as you shop around for cover, using the services of an insurance broker allows you to have just one point of contact from when you start comparing cover to the time you submit your application.
  • Ongoing help. The service a broker provides doesn’t end when you take out cover. Your insurance broker can also help you review your cover needs as your circumstances change and offer expert assistance if you never need to make an income protection claim.

Other ways a broker can help when choosing a policy

When it comes to choosing the actual policy and tailoring it to your own needs, it can be easy to get lost swimming in complex, never-ending product documents. A broker can assist here in a number of ways.

  • Avoid expensive extras you don’t need. Unless you understand all the benefits of an income protection policy, you could end up paying for benefits you are unlikely to ever use. An insurance broker can help you avoid this trap by explaining each of the policy features and identifying those relevant to your situation.
  • Choose a structure suitable to your situation. Some insurers will only pay income protection benefits if you’re unable to perform any occupation to which you are suited by education, training or experience. A broker will help you find a policy that provides benefits if you are unable to perform the duties of your normal occupation.
  • Choose the right payment structure. Most insurers will let you choose stepped premiums (which increase gradually overtime) or level premiums (which start high but remain the same over time). What’s more, you can usually decide how often you pay your premium over the course of the year. A broker can help you align these different options to your situation.
  • Choosing the wrong benefit or waiting period. If you became disabled, how long would you be able to survive without your income until benefits started being paid? How long would you want to be able to receive benefits? Your broker can help you answer these questions and tailor cover to suit your needs.
  • Find cover matching the price. While price is certainly a factor when choosing cover, the right policy for you isn’t necessarily the cheapest. A broker can help you find a policy that combines affordability with features you need.

What are the alternatives to receiving income protection advice?

The alternative to receiving income protection advice is to buy cover direct from a life insurance provider. Direct life insurance policies are designed to be easier to understand and more accessible to a wide range of people. However, it’s important to consider those benefits in relation to the disadvantages of this approach when deciding whether direct income protection insurance is right for you.

Advantages of purchasing cover direct

  • You have complete control over which cover you choose, and you can search for a policy whenever it suits you.
  • Direct income protection insurance is generally quite straightforward in design and easy to understand.
  • Applying for direct life insurance is easy, with minimal underwriting and no need to undergo a medical assessment. Underwriting is completed at the time of claim.
  • It’s quicker than purchasing cover through a broker, and you can take out cover online or over the phone.
  • There is often an increased range of benefits available to applicants, such as multi-policy discounts for taking out other types of insurance.

Drawbacks of purchasing cover direct

  • Because underwriting is completed at claim time, you can face issues if the provider finds that certain details should have been disclosed previously i.e. existing medical conditions
  • Less flexibility to tailor cover closer to your needs through additional features or alternative payment structures.
  • You need to rely on your own knowledge and understanding of the cover options to ensure that you choose the right type and level of cover.
  • Working out how much cover you actually require for your situation can be difficult. There may be an increased risk of being underinsured
  • The simpler underwriting process often results in direct cover costing more than cover purchased with advice
  • You have access to fewer cover options than if you purchase a policy through an insurance broker

Purchasing with the help of a financial adviser: What are the pros and cons?

  • Gives you the chance to compare the different products available online. Your financial insurance adviser can help you in comparing quotes from a range of insurers. This will give you confidence to make the right decision.
  • Explain the different features of the policy including how tax works. An adviser can help you understand its typical features such as benefit level, waiting period, benefit period, product variation, premiums, tax deduction, restriction, free limit, etc.
  • Make available for you to find suitable cover which will save you money. An adviser can you help you match your personal circumstances:
    • Finding income protection policies, which match your needs.
    • Pinpoint which policies are suited for you.
    • Assist you to resolve how much coverage you really need.
    • Propose the duration of your policy.
  • May take longer than normal. Normally the process involves longer period of time to complete the transaction, which may have the possibility of being overtaken by negative events.
  • Some of your premium will go to the adviser. This is because you are also paying for their service of finding you the right policy.
  • You might not be able to do it online. Some advisers will require a face to face in order to provide you with service.

Purchasing directly through a provider: What are the pros and cons?

  • Can be done online. This can provide you with a quick convenient solution.
  • Generally no medical examinations. You generally won't be required to undertake a medical examination to get approval of your insurance.
  • You're unable to get the same level of advice. Purchasing Income Protection online prevents you from reviewing the products with a certified financial insurance adviser.
  • Can be more expensive. This is due to the reduced underwriting.
  • Cover might not be as tailored. There may be some coverage, which is not actually relevant to your cover requirements.

Frequently Asked Questions

Interested in receiving advice from a consultant?

If you are interested in applying for cover with an insurance consultant, you can make a secure enquiry by filling out the form located above. An certified insurance consultant will be in touch to discuss different policy options and provide you with a free quote for cover. Once you have found a policy you are interested in applying for, your consultant can help you organise your application. This service is provided free of charge.

Receive quotes for income protection insurance from an adviser

William Eve

Will is a personal finance writer for specialising in content on insurance. While he cannot give personal advice to clients, Will enjoys explaining the intricacies of different types of protective cover to help individuals and businesses find affordable cover that won't leave them underinsured.

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