Picking income protection based on price alone.

November 29, 2011

Every now and then I get a call or an email from a prospective client saying that they have received a cheaper quote for an income protection policy elsewhere.

There are only 5 life assurance companies in Ireland that offer income protection cover to an individual. Each of these companies have their own charging structures based on their own risk assessment policies.  They set their own prices.  However, the people that sell their income protection product for them, be it a broker, adviser, bank or a direct sales person from that company, must all charge the same price.  It costs the same to get an income protection policy from Med Protect as it would through a bank or from the life assurance directly.

So why the difference in price?

Basically, the lower price means that you are taking a lower quality policy or lower level of cover.  This does not however mean that a higher price is a better policy.  When selecting which income protection policy to go with, you must first decide on what it is you want from your policy and how you would like your policy structured.  You then look at which of the 5 companies offer what you are looking for and then you select the provider that will give it to you least expensively.

A major factor in selecting an income protection policy is how likely it is you will receive a payout in the event of a claim. Some companies have a better history in this than others!  It is not the more expensive ones that pay out more either.  We would generally pick from a list of 4 life assurance companies as 1 of the 5 life assurance company’s income protection policies is not a very good policy and it has severe limits on what it covers.  Each of the remaining 4 life assurance companies has it’s own pros and cons.  For instance, Aviva provide access to Best Doctors, which is a second opinion service from World leading medical experts – none of the others offer this.  Likewise, New Ireland have a ‘Confirmed Income Option’, which means that you confirm your income when you take out your policy, so your level of cover is set in stone.  If you are earning less when it comes to a claim, it doesn’t matter, you will still receive the benefit that you were applying for.  Again, none of the others
offer this.  Friends First have a very strong history of paying claims in the individual income protection market.  Both Aviva and New Ireland are quite new to the individual income protection market.

In summary, each company has it’s own strength and prices their product accordingly.  You can get an income protection policy from as low as €15 per month if you like, but you will get what you pay for.  €15 per month from Broker A gets you the exact same as €15 from Broker B.

The difference is the correct advice.

Our job is to ensure that your policy gives you exactly what it is that you are looking for from your income protection policy.  We make sure that the policy meets with your monthly budget and that when your policy starts, you are on cover for what you expected, so there will be no nasty small print problems if it comes to a claim.

Call an advisor today on 1890 254 000 or fill in our quote request form here.