If you’ve read any of my articles about Income Protection, it may well be something you are considering purchasing. But where to buy Income Protection?? Should you consult anv insurance broker? Is it worth having a look at price comparison sites? Can you purchase it through work? This article looks at your options for Income Protection, and what the advantages and disadvantages are.
If you suddenly became too ill to work, an Income Protection policy would provide peace of mind that you could still support your family until the time comes that you are able to return to employment. It’s important that any policy you purchase suits your needs in that it will provide enough money to pay your rent/mortgage/bills each month, and feed your children – purchasing insufficient cover is just going to be a waste of money. So where can you find Income Protection?
Buy Income Protection Through Your Employer
There are some employers that offer Income Protection as part of your employment package, which sounds nice and hassle-free doesn’t it?…
The Pros
- It’s All Done For You – No need to worry about filling in online forms or sitting on hold for ages when you’d rather be scrolling through Instagram, all the hard work is done for you.
- It Might Not Cost You Anything – Executive Income Protection is when your employer pays your monthly Income Protection premiums for you, which could be handy if you’re not sure you could afford to pay for a personal Income Protection policy yourself.
The Cons
- It’s All Done For You – If your employer purchases your Income Protection plan then you have no say in choosing it yourself, and it could be that there are plans out there that would better suit yours and your family’s needs.
- It Might Cost You After All – In the event of a claim being made when you have Executive Income Protection, the insurance company will pay out to the policyholder – your employer, rather than to you directly. You will then be paid by your employer through PAYE. This means that you would have to pay income tax and national insurance on that money, rather than the tax-free monthly sum you would receive with a personal Income Protection policy.
Price Comparison Websites
Comparison sites such as MoneySuperMarket can be a good place to start when it comes to shopping around for any type of insurance. These sites generate a list of providers and what their policies cost so you can see who is the cheapest. And cost is all that really matters, right?
The Pros
- It’s Easy – It’s literally just a case of typing in what you’re looking for and seeing what pops up. You can do it in the comfort of your own home, at any time of the day or night, and you don’t have to see anyone or speak to anyone.
- It Can Save You Money – The whole point of these sites is so that you can see who is offering the best deal money-wise when it comes to Insurance Policies.
- Choice – There are loads of price comparison sites out there to choose from, and even though a lot will have the same companies signed up, there will be some that list companies only on their site, so even if you have to search 2 or 3 comparison sites, it’s still easier than contacting each insurance company individually.
The Cons
- The Search Function Is Basic – Price comparison sites tend to all be very simplistic, suggesting pre-filled options for certain amounts of cover, which isn’t beneficial if you have multiple things you want to financially protect, such as a mortgage and household bills.
- There’s No Advice – Everything on a price comparison website relies on the customer making their decision based entirely on price – there’s no actual person you can talk to, unless you were to contact the insurance company you are considering direct – in which case you almost certainly won’t be offered the same deal that is offered through the comparison site or higher. Because you are doing all the research off your own back you have no way of knowing whether you’ve taken out the right insurance or chosen the right company.
- You’re On Your Own – You have to pick the right company, you complete the application on your own and you have to make a claim on your own. This means if you choose an insurance company that won’t cover certain conditions or you get something wrong completing the application, the fault rest entirely on YOU and you cannot claim through FSC. (Financial compensation scheme)
Contacting An Insurance Company Direct
It seems that every other advert on TV these days is for insurance, and there’s always some cute furry mascot or irritating jingle banging on about the free quotes on offer, so it makes sense to give one of these a call and see what they can offer you, doesn’t it?
The Pros
- You Can Talk To An Actual Person – Researching different insurance companies online is definitely convenient, and often a good starting point, but nothing compares to being able to speak to a human being who can answer any questions you might have. You are much more likely to purchase the correct amount of cover you need if you have a little guidance rather than going solely on what is the cheapest.
- It’s Faster – You’ve decided this is the company for you and you know what you want, plus if you don’t want to talk to somebody over the phone you can quite often apply online.
The Cons
- They Can’t Give You Any Advice – When you call an insurance company direct you are essentially talking to someone in a call centre. These are the people who might call you on a Friday evening when you’re trying to eat dinner and ask if you want to save money on your home insurance. That’s not to say they don’t have some knowledge – but it will be limited to what is in the script they have to read from. You could be speaking to a non-advised broker – similar to an independent insurance broker, except they work for that one particular insurance company. They may indeed be very knowledgeable about the products they are selling, but they can’t give you any advice on whether they think it is the best policy for you, and so once again, you are largely left in the dark to make the decision unaided.
- More Expensive – Believe it or not, going direct to an insurance company can often be more expensive than using a comparison sight or broker. The reason being on a comparison sight or using a broker the insurers know you’re comparing prices, meaning they HAVE to offer the best price to be top of the list, whereas if you go direct to an insurance company, they are competing with no one.
Being able to speak to someone who does have some knowledge about Income Protection policies is definitely better than simply browsing a price comparison website. But wouldn’t it be nice to get some impartial advice from someone who knows what they’re talking about, but isn’t affiliated with one particular insurance company.
There is an option that gives you just that….
Advised Brokers/Financial Advisors
So where to buy Income Protection isn’t that easy a question is it? You won’t find many ‘cons’ when it comes to seeking the advice of a professional insurance broker. Some of the most intelligent and attractive people in the world become brokers or financial advisors (source: unknown), and as luck would have it, I know some.
- They’re Pros – You will literally be talking to someone who’s very profession is being a real life comparison website – but with sound financial advice thrown in on top.
- They Offer Protection – Not in the Mafia sense, obviously, but when you take the advice of a professional broker you are protected under the Financial Compensation Scheme. This means that if you were to take out an Income Protection policy based on the advice of your broker and it doesn’t pay out because they gave you bad advice you would be financially protected. Can’t say fairer than that, can you?
- They Do All The Work For You – By using a broker such as ourselves, you have a professional doing all the hard work for you. It is literally a brokers job to listen to what type of cover you want, advise you on whether that best suits your needs or not, and then source the right deal for you. They’ll have access to companies who might not be listed on price comparison websites, and it is in their interest to get you the right policy.
So, my advice would always be to go to a professional broker. They can cover the same ground, and more, as a price comparison website, and they know just as much about each company’s products as their own employees do. So, even if you fancy having a little browse at what’s out there for yourself, give us, or those like us, a call before you purchase a policy…what do you have to lose? I hope we have answered your “Where to buy Income Protection?” question!
If you would like a quote, or if you have any insurance-related questions please do get in touch. Our advice is without obligation, and one of our qualified advisors would be more than happy to help.
