Insuring against sickness

[contractor79]

Hi
Have you taken out insurance against sickness which would mean you couldn't work hence your co wouldn't get paid?
I took out a policy costing £500 for a year which pays me £500/week from the second week off ill up to 6 months.
I'm considering whether to take out a further insurance costing £35/month to cover from 6 months time until retirement age.
Would you say these insurances are worth it? Are they easy to claim? Would I lose out on generous state benefits if I had this income coming in?
regards

[b0redom]

What are the caveats? Do you have to be signed off by a doctor? What proof do you have to produce to get paid? I'd be pretty dubious. What's to stop you going to the doctor and being signed off with stress if you fancied a holiday?

[Little'Old Me]

Hi
Have you taken out insurance against sickness which would mean you couldn't work hence your co wouldn't get paid?
I took out a policy costing £500 for a year which pays me £500/week from the second week off ill up to 6 months.
I'm considering whether to take out a further insurance costing £35/month to cover from 6 months time until retirement age.
Would you say these insurances are worth it? Are they easy to claim? Would I lose out on generous state benefits if I had this income coming in?
regards

Have you checked with the insurance company various scenarios if they would pay you? I would get it in writing to make sure.

The reason I mention this, is many policies will not pay you if you do contract work. Also some will reduce the amount they pay by the amount the state pays you. Others will insist you have to be too ill to dress yourself or they will not pay out. And then there the if you are ill with something that you had before they won't pay out. (Of course once you have made a claim, when the renewal comes round at the end of the year - they will not renew the policy).....

For an employee on a permanent contract they are great - especially if the company pays for it, as they can claim it as a business expense. But then, that's because the chances of claiming are pretty slim. In my nearly 30 years in business, (and 20+ years ago, I sold what was then called Permanent Health Insurance!) I have only came across 2 occassions when someone successfully claimed - one had Cancer and the other Parkinson's.

[DaveB]

Worth checking what the consider to be "too ill to work" as well. You might be unable to do the job you have now, but if they consider you fit to do any kind of work at all then they may not pay out.

Being unable to work in IT due to RSI may not stop you being able to flip burgers in the local McDonalds...

[contractor79]

yeah good advise folks, I'm not sure about it now either

[Flopsy]

I'm a disabled contractor and I've not found the policies very good at all.

They won't cover me because if my existing disability but I've seen how other contractors have coped with them. Friends who developed cancer and MS found themselves unable to claim. The cancer was decided by the insurance company not life threatening (testicular) and they insisted that the person could/should work through the chemotherapy/radiotherapy.

With the MS it was a relapsing/remitting sort and they decided that she should/could work. Easier said when done due to hospital stays and appointments.

As contractors I've found that the contact isn't always blatantly terminated on illness but that companies sack when a renewal is due or replace a contractor with a permie to get around it (or similar strategy). Both of the examples above had their contracts ended and found it hard to get new ones. Disability discrimination was looked into by both parties but they were advised against it as being contractors it was harder to prove.

I've had a contract terminated through illness and found that most policies don't cover the physical problems that I have (even if they would insure me as an already disabled person).

[contractor79]

thanks flopsy, yes I fear that I could be paying £1k each year for insurance that I may not be able to claim on too

[ASB]

thanks flopsy, yes I fear that I could be paying £1k each year for insurance that I may not be able to claim on too

You might find you can get better rates and more flexibility if your company insures you rather than you insuring yourself. Your general strategy of 2 policies one with a short lead time and modest duration and then one with a long lead time with a long duration can lead to better overall costs - but one of the issues here can be that if you have a short term event that doesn't turn into a long term one the longer term insurer may well be entitled to refuse payment on the ground they should have been notified so it is important to try and ensure that they will accept the ongoing risk based on the initial profile rather than a revised profile every year.

As has also been mentioned "own occupation" is important, but "any occupation" tends to be much cheaper - and much harder to claim on.

[Fred Bloggs]

I recommend you look at Friends Provident. I have a policy that covers me after 6 months illness and unable to do my normal job. It pays me £1500 a month till I'm 65 (I'm 52). I declared a history of depression and so I'm not covered for that. All else seems covered as far as I can see. I understand that FP have a pretty good record of honouring their claims. (I hope!).

[centurian]

Have you checked with the insurance company various scenarios if they would pay you? I would get it in writing to make sure.

The reason I mention this, is many policies will not pay you if you do contract work. Also some will reduce the amount they pay by the amount the state pays you. Others will insist you have to be too ill to dress yourself or they will not pay out. And then there the if you are ill with something that you had before they won't pay out. (Of course once you have made a claim, when the renewal comes round at the end of the year - they will not renew the policy).....

But they will still take the premiums - even if they know you are a contractor at the start... but still refuse to pay out.


A bit like payment protection insurance. Years ago I was caught out by this... I told them I was self-employed when taking out a loan. They gave me the loan and PPI.

But when I was out of work, I tried to claim on PPI, at which point they told me that they would not pay out because I was self-employed - even though they knew I was self-employed in the first place.

I then asked them why I would want the insurance to which they replied that the loan would be paid off in the case of sudden death - even though I indicated that I had no dependents, so why I could care was also beyond me.

PPI is a lot tighter now, but the same principles apply. You must read the small print very carefully and never assume that just because you've told them - that this covers you.