Help in choosing income protection insurance
Independent financial research company Defaqto offers advice on short-term income protection and long-term income protection. Selecting appropriate income protection products is particularly complicated given the variation that exists between the different options available:
Short-term income protection
52% include unemployment cover – 8% include this automatically while the majority offers it as an option
44% offer unemployment benefit on a standalone basis
53% pay out for just 12 months maximum. The remaining policies offer one or more optional benefit payment terms - 16% offer 18 months and 19% offer 24 months.
Long-term income protection
8% have an optional redundancy cover benefit
86% pay out for as long as the policyholder is sick or disabled, or until they retire - 20% also offer a limited benefit term option
14% are limited benefit term products only.
Given this variation, it is important for customers to be able to understand the features benefits and cover offered by different products.
Income protection insurance news: 8 March 2011