With the recession it would be easy to think that many people would be putting off taking out protection insurance and increasing their monthly expenses, but you may be wrong. An increasing number of consumers may be covering themselves with income protection insurance and whole life products, according to the latest data from Swiss Re, which shows sales, are on the increase.

In its latest annual Term & Health Watch publication, which focuses on the protection market in the UK, the organisation has revealed a 13.5 per cent rise in income protection sales in 2008. The sales peaked at 126,815 compared with 111,780 recorded in 2007, with whole life cover also rising by 28.8 per cent – 282,438 policies – over the same period, the highest level since 2000.

However, new term insurance and critical illness sales performed dismally after falling by 6.1 per cent and 4.7 per cent respectively. “But the good news is that non-mortgage-related sales rose by 17.5 per cent,” said the report’s co-author Ron Wheatcroft.

“We attribute this partly to a lack of confidence in savings and investment products, and partly because consumers are concentrating on essentials in the wake of rising unemployment.” He added that “this is a good signal that protection is seen as core”.

Income protection can come in handy should someone lose their source of income as a result of an accident sickness or unemployment. There are two types of policy, mortgage protection insurance that typically covers a short term period of twelve to twenty four months and for a maximum of 130% of the monthly mortgage payment.

The second is income protection insurance this cover is designed for long term cover and typically can be take to cover up to your 65 th birthday and for 50% of your annual income. This type of cover can be expensive especially if you take a short deferment period, this is the time you have to wait before you can make a claim. These range from 4 weeks to 52 weeks with some providers offering 8 week and 26 week.

Where can I find out more about protection insurance?
There are many protection comparisons websites that explain the different types of income protection available on the market. Many of these offer online quotes so you can check the premiums available and adjust the requirements to keep the monthly cost down. Many of these sites do not take the full commission that the provider would pay them for setting up the policy which results you receiving cheaper premiums than you would get if you went direct to the insurance company.

Alternatively you can speak to an independent financial advisor who will complete a detailed fact find to establish your needs and budget before making a recommendation for your protection needs. You can then make a balanced choice as too what protection you take and if you are not happy with the price they quote you can use their advice and shop around for the cover.

Jason Haines is a protection and mortgage advisor at godirect.co.uk, one of the UK’s most trusted information site about personal finance. Here you can find details on the best mortgage lenders and mortgage rates, instant mortgage life insurance quotes.

Article Source: Despite the Recession Consumers are Still Taking out Income Protection

…

Read more:
Despite the Recession Consumers are Still Taking out Income Protection