# Income protection - public sector



## Dublin Abu (13 Sep 2021)

I am looking for some advice.
I have a policy for income protection via a specialist public sector broker. A stipulation in policy is that I must be a member of a particular trade union.
I am with this policy for around 5 years. No claims. But happy with reassurance and peace of mind I get.

I did a ‘financial review ‘ with an independent broker. He said the policy I have is not good. And that he could get a better product via ‘Royal London’. I did the paperwork / assessment for this around 2 months ago.

what questions should I be asking. - is my existing policy not good ?


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## ClubMan (13 Sep 2021)

Cornmarket by any chance?
I probably can't really give my opinion on them without getting myself and AAM into trouble!

You need to look at the cost and the terms and conditions of each policy to understand and compare them.
Particularly the conditions under which they will or will not pay out, how much and for how long.

If necessary your advisor should be able to help.
I'm assuming that they're properly independent and working for a fee rather than commission.


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## NoRegretsCoyote (13 Sep 2021)

Dublin Abu said:


> is my existing policy not good ?


All you can do is compare cost and payout conditions.



Dublin Abu said:


> A stipulation in policy is that I must be a member of a particular trade union.


You will have to be a member when you take out the policy. Check the conditions, but unlikely they can refuse to pay out if you leave the union.


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## Thirsty (13 Sep 2021)

I won't pretend to be an expert on these types of policies; but from other's experience with them I would suggest there are at least three questions you need to ask:

1. what percentage of base salary will be paid to you
2. how long will the income protection continue to be paid (some policies stop payment after X months regardless of your health status)
3. will the policy pay if you are unable to continue your usual profession / trade or will it only pay if you are unable to carry out *any *work


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## Dublin Abu (13 Sep 2021)

Thanks for feedback. 

Yes Cornmarket 

Guess the comments left are  what broker is telling me are the issues.

Yes he’s on commission.


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## ClubMan (13 Sep 2021)

Dublin Abu said:


> Guess the comments left are  what broker is telling me are the issues.


Not really sure what you mean here?


Dublin Abu said:


> Yes he’s on commission.


So he's *not* independent?


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## Protocol (13 Sep 2021)

As a comparison, my public service IP scheme is as follows:

Broker = Cornmarket
All staff covered
Insurer = Irish Life

It pays up to 75% of salary less any other income that you may be entitled to (e.g. half pay, Ill Health Early
Retirement Pension, Temporary Rehabilitation Remuneration, State Illness Benefit or State Invalidity Pension).

Premium = 0.86% gross, before tax relief.

Net costs = 0.52%


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## LS400 (14 Sep 2021)

Out of pure curiosity, is there a similar scheme open to the private sector?, and, why do you have to be a member of a trade union. I would have thought these are the last people an insurance company want to be dealing with?


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## NoRegretsCoyote (14 Sep 2021)

LS400 said:


> . I would have thought these are the last people an insurance company want to be


Unions negotiate a group discount for members AFAIK.


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## RetirementPlan (14 Sep 2021)

You also need to consider the track record of the insurer for paying out on claims. There's no point in paying for insurance for years only to have them wiggle out on a technicality. This is where the union can add value, as they would have sight of claims history over the years.


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## ClubMan (14 Sep 2021)

Protocol said:


> Premium = 0.86% gross, before tax relief.


0.86% of your gross income?
Are there any other charges?
Are there restrictions under what circumstances it pays out (e.g. only if you can't do *any* work, not just your "normal" job? Any lead times in paying out? Etc.) any limits on how long it pays out for etc.?


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## ClubMan (14 Sep 2021)

LS400 said:


> Out of pure curiosity, is there a similar scheme open to the private sector?


Yes, there are critical illness and income protection policies available to the general public.






						Income protection insurance - CCPC
					

Find out about what you should consider if you're thinking about taking out income protection insurance and what kind of cover is available.




					www.ccpc.ie


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## RetirementPlan (14 Sep 2021)

LS400 said:


> Out of pure curiosity, is there a similar scheme open to the private sector?, and, why do you have to be a member of a trade union. I would have thought these are the last people an insurance company want to be dealing with?


Many unions have very strong 'affiliate' relationships with insurance companies. Check the membership benefits sections of any of the union websites for examples of this. 
Why would you think insurance companies would be turning away good business?

Many 'good' private sector employers provide disability insurance as part of their in-house pension schemes. so income protection isn't so relevant for those staff. One of several items that tends to gets missed when you hear those public/private salary comparisons.


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## LS400 (14 Sep 2021)

Yeah, I just called my pension contact, I have the disability insurance alright, kicks in after 52 weeks.


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## Baby boomer (14 Sep 2021)

Unlike a lot of union sponsored schemes (AVC's for instance) the income protection one is excellent.  Mrs Boomer was in the teacher's one for years and it was very similar to the PS one described by Protocol above.  The coverage dovetails exactly with the public service sick pay scheme and effectively tops it up to 75% of salary.  Because the public service sick pay and ill-health retirement is so good, the coverage "gap" is quite small and therefore the premium is very competitive.  

It's particularly good in the first half to two thirds or so of a typical PS career as the retirement on ill health is service related and would have a low payout. (And probably high mortgage/children related expenses.) As you approach retirement age, the ill health retirement pension is significant, the "gap" is smaller and therefore the policy benefit is lower. As benefit stops when you reach normal retirement age (you go onto pension) it makes little sense to pay premiums in the last few years leading up to it.


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## Dublin Abu (14 Sep 2021)

Thank you all for great input.  All appreciated. The scheme is tied to my FORSA union membership. I don’t think I can leave union.


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## Dave Vanian (14 Sep 2021)

An entirely anecdotal comment - now in my fourth decade in this business and in that time I have processed Income Protection claims with Friends First (now Aviva) and Irish Life for clients.  Friends First were very fair and quick to pay out.  Irish Life were invariably a nightmare, sending clients to their own medical examiners who invariably disagreed with the clients' own doctors as to whether or not the clients were fit to work.  I have read similar stories here on Askaboutmoney.  For this reason I advise clients to be wary of Irish Life for Income Protection.  But I repeat - this is entirely anecdotal based on my own experience and obviously the specifics of the claims would have been relevant.  I'm aware of Irish Life's overall claims statistics and that they do pay out significant amounts in Income Protection claims every year.


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## Protocol (15 Sep 2021)

ClubMan said:


> 0.86% of your gross income?
> Are there any other charges?


Yes, 0.86% of gross income.

No other charges.


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## Protocol (15 Sep 2021)

ClubMan said:


> Are there restrictions under what circumstances it pays out (e.g. only if you can't do *any* work, not just your "normal" job? Any lead times in paying out? Etc.) any limits on how long it pays out for etc.?


*5 How disabled do I have to be to qualify for benefit under
the Plan?*
To qualify for benefit under the Plan, Irish Life must be satisfied
that you are totally unable to carry out the duties of your normal
occupation because of illness or injury, and that you are not
engaged in any other occupation for profit, reward or remuneration.
Disablement is defined as for the purpose of this Plan:
(i) Total disablement shall be deemed to exist where (a) the
Insured Person is unable to carry out the duties pertaining to his/
her normal occupation by reason of disablement arising from
bodily injury sustained or sickness or illness contracted and (b)
the Insured Person is not engaging on a full-time or part-time
basis in any other occupation (whether or not for profit or reward
or remuneration, including benefit in kind)
and
(ii) Partial disablement shall be deemed to exist where (a)
following a period of total disablement as in Sub-Provision (i)
above, which period is to be decided by the Company, an Insured
Person is unable to carry out the duties pertaining to his normal
occupation by reason of disablement arising from bodily injury
sustained or sickness or illness contracted and (b) the Insured
Person with the written consent of the Company re-engages in
his/her normal occupation with loss of earnings as a result or
engages in some other occupation on a full-time or part-time
basis (whether or not for profit or reward or remuneration,
including benefit in kind).


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## Protocol (15 Sep 2021)

ClubMan said:


> Are there restrictions under what circumstances it pays out (e.g. only if you can't do *any* work, not just your "normal" job? Any lead times in paying out? Etc.) any limits on how long it pays out for etc.?


*4 For how long will I be paid benefit under the Plan?*
The Plan will continue to pay benefit as long as your illness or injury
prevents you from doing your normal job and you are not following
any other occupation. Disability Benefit payments will stop when
either:
• You recover or
• When Irish Life decides, based on medical evidence, that you are
no longer prevented from carrying out your normal job because of
illness or injury or
• You return to work or
• You die or
• You reach your 65th birthday,
whichever is the earliest.
In certain cases benefits may be paid where the member returns to
work but at a reduced level of earnings due to partial disability.


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## Dublin Abu (15 Sep 2021)

looks like can get a bit complicated when potential claim arises.
 Any feedback on Royal London plan ?


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## ClubMan (15 Sep 2021)

Dublin Abu said:


> looks like can get a bit complicated when potential claim arises.
> Any feedback on Royal London plan ?


As I said before, read the terms and conditions of each policy to compare them and understand how they work.


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## Dublin Abu (15 Sep 2021)

Thanks Clubman and other posters. Much appreciated


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