Have you been following the plight of Gary Smith? 10 million Brits have. Aviva’s latest advertising campaign – airing every Sunday night during ITV’s popular period drama – has caused something of a stir. The ads tell the true story of Gary Smith, who had a motorcycle accident in 2002 that prevented him from continuing his job as an engineer. LuckilyGaryhad taken out an insurance policy that paid him an income if he was unable to work. OFCOM received a handful of complaints about the ad.
Better than PPI
Income protection is a form of insurance that will pay you a regular income if you are unable to work due to illness or disability. You can also add on cover to protect against general unemployment.
Income protection has been somewhat overwhelmed in recent years by the similar form of cover; Payment Protection Insurance (PPI). PPI is usually sold alongside credit cards, loans and mortgages and will repay debt if your income dries up.
It’s been in the news recently after banks were found to be mis-selling it by the bucket-load back in the boom years. And as if fraudulent mis-selling wasn’t enough, this form is cover is actually inferior to income protection.
PPI generally only lasts for one or two years, income protection can last for the short term or long term. For example, most policies will last until your retirement date or until you are fit enough to return to work. If you do get back to work – but on a lower wage – most income protection plans will also supplement your income.
Moreover, the number of exclusions in most income protection policies is far fewer than in PPI. Income protection will cover you for musculoskeletal and mental health issues (including stress) – the two most common reasons for being off work; PPI will not. This difference plays itself out in the successful claim rates of the two types of cover: income protection is around 90%, while PPI is just 50%.
Sally Bowyer, Managing Director of financial claims specialist BrunelFranklin.com says that the public are slowly becoming wiser to the tactics of mis-selling, but that a lot of the damage is already done: “It is important to realise that we may all unwittingly have taken out PPI during the years when lenders were offering a seemingly endless line of credit in the form of loans and credit cards in particular. It costs nothing to check your paperwork for insurances that you may not even know you are paying for. PPI per se is not a bad product, however the onus is on the vendor to ensure the product is the best for your needs at the time of sale. If the best product for your needs was not offered, or if you were unaware of the true cost, for example, you may have grounds for a refund.”
Learn more about PPI refunds and find out if you could apply for a refund today! Visit the website www.brunelfranklin.com or call Brunel Franklin, free, on 0800 051 54 51.