Know when to hold ‘em

Our income protection policy holders would be well aware of the substantial increases being applied to premiums, regardless of your insurer.

As we have discussed previously, it is a type of policy under threat, as claims are far exceeding premiums for most carriers, particularly due to mental health. However, we remain strong advocates of income protection policies, as we have many clients on long term claims. That experience reinforces the importance of such policies when we deliver advice. Despite the increases, we believe that these policies remain great value, with a premium that is deductible in most cases.

At times recently, clients have asked if they should change insurers. It is a very understandable question if you just received a big increase in premium. Our answer is predominantly negative. A big reason is that new policies were significantly weakened in April 2020 and we expect further change to the product range later in 2021. Therefore, if you hold a current policy it would be wise to hold for the long term in many cases. Obviously, we would encourage you to seek advice before making any changes.

The grim reality of income protection policies though is that they are a necessary evil. No one likes paying premiums but if you asked any of our clients currently on claim they would all advise that life would not be the same without that dependable ongoing income stream.