Income protection insurance guide published

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Income protection insurance guide published

Mon 29th Sep 2008

A "beginner's guide" to income protection has been published by the Independent.

The newspaper explains that income protection insurance (IPI) is cover paid monthly in the event of loss of income, to a maximum of 50 to 65 per cent of the holder's previous gross earnings.

It adds that IPI will provide cover in the event of illness or accident leaving a person unable to work, citing Department for Work and Pensions statistics which show one in seven people will be in this situation at some point.

According to the Independent, women tend to pay higher premiums than men for IPI as well as smokers and people without a robust medical history.

The risks of a holder's job also affect the cost.

Payment protection insurance (PPI) is also discussed as a way of covering repayments on loans, credit cards and mortgages in the case of illness, accident or unemployment through no fault of the policy holder.

But readers are warned to mind the "many restrictions and exclusions" of PPI.

Consumer group Which? has urged the Financial Services Authority to impose "sweeping reforms" on PPI.

It called for more than just fines to deter firms from mis-selling the product.

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