Key Tips for Finding the Best Deal for Short-Term Income Protection Insurance and Mortgage Insurance

For buyers of car or home insurance in the UK, price comparison sites are the ideal place to start looking for premium savings. However, doing the same to purchase short-term income protection insurance or mortgage payment protection could prove to be a costly mistake. That’s because this type of insurance is a niche product. Expert advice is essential for anyone looking to purchase a policy to pay their mortgage and other bills if they are unable to work.

In fact, many people are not aware that this type of insurance exists. Short-term income protection insurance is a clean replacement for the now largely mistrustful payment protection insurance. It has just cost British banks billions to compensate their customers for the mis-selling of payment protection insurance. In fact, no surprise, most major banks simply don’t sell that anymore. Fortunately, the major insurance companies have decided to call the new, cleaned up and highly regulated product a new name; Short Term Income Protection Insurance. This distinguishes this type of coverage so that buyers know they are looking at the new type of policy approved by the government regulator, the Financial Services Authority (FSA). The FSA is now beginning to enforce the strict new rules governing how this product is sold very seriously.

So, just to confuse things, Britain’s largest construction company and several specialist suppliers decided to call this cover Lifestyle Protection. At least it stands out as a totally different name from the disgrace payment protection insurance. However, the FSA on its Money Advice Service website still calls short-term income protection a version of payment protection insurance! The first piece of advice for making a good deal is simply to find out what reliable and trustworthy providers now call this product.

At least the independent and unbiased website of Money Advice Service of the FSA explains the difference. It also allows anyone to find these products and compare prices on their comparison tables for each such policy offered in the UK. Because the regulator has made it mandatory for each provider to place details of their products on their website, they offer a wide range of over 400 different products. Until the FSA created this benchmark, there was nothing like it anywhere in the UK, but most people are still unaware that this valuable research tool is provided free of charge.

Commercial commission-based price comparison websites – those brands heavily advertised on television – simply cannot come close to the Money Advice Service offering. It’s also the only place to find and compare direct, low cost products that don’t appear on TV comparison sites.

By using the FSA’s Money Advice Service website, anyone can:

Search in one place for a wide range of products from all the major brands as well as specialized suppliers at low prices
Be sure to get a true price comparison in the market place.
Get the best offer that meets their needs
Be aware that each listed supplier is authorized by the FSA to offer a
the product they closely regulate

This is excellent information, but navigating the Money Advice Service website can be complicated. It is difficult at first to find an individual type of insurance policy, for example. This is because the Money Advice Service covers many types of financial products, not just short-term income protection insurance. It is essential to keep or purchase online a simple guide to find the lowest price on the Money Advice Service website. These can be downloaded free of charge from one or more specialized providers. These guides provide a “roadmap” for quickly navigating the Money Advice Service website.

Once on the right section of the Money Advice Service website, a single click will then take the individual to the provider. They can then purchase the policy or simply look for more details before making their decision. Most importantly, this allows a buyer to refine their choice and focus on the suppliers with the best offers.

The second tip for getting good value for money; some of the smaller specialty suppliers offer the same product as many mass market brands at less than a third of the price. The Money Advice website is very informative about the often huge differences in prices charged for the same coverage. This is mainly due to the fact that the major players in the market offer this insurance as a premium product or that brokers take a substantial commission for individual sales advice. If you don’t need tailor-made advice from an intermediary, there are massive savings to be made by switching directly.

What is covered? By far the majority of policies reimburse up to one year if the insured is unable to work due to accident, illness or unemployment. Benefits are chosen by the individual based on his or her needs. Three of the leading UK specialist providers confirm that the majority of their clients have chosen an average monthly benefit of £1,000. For this coverage, their clients mainly pay a premium of between £20 and £40 per month. The actual price depends on the age of the buyer and the waiting period they choose. The waiting period is similar to a surplus on a motor policy, but it is the number of days before the claim is paid rather than a monetary amount.

If a person were to walk into a mortgage broker or financial advisor office, the policy and price offered to them would reflect the personalized service provided. It’s easy to be charged twice the price for the same coverage, so it’s a good idea to do some research online before visiting a broker. For those who wish to purchase online, the process is simple. No medical evidence is required or a detailed lifestyle or health questionnaire must be completed. Contact information and a dozen or so questions, mostly about the candidate’s current job, tend to be average.

The last piece of advice for making a good deal is when to purchase short-term income protection insurance or similar mortgage payment protection insurance. This is a critical point. The individual should not be aware of impending employment problems such as a downsizing of his or her organization or an impending takeover. Indeed, most insurers will refuse to accept any application where the probability of redundancy is significantly higher than average. Therefore, the only time to apply for this product is when the individual is still in a stable job.