Consumers must seek advice on “risky” income protection, says Charcol

Today (November 6) is stress awareness day, and Charcol is highlighting some anomalies people may encounter when seeking income protection (PHI).

Stress is the second most common cause of claims, yet professions considered among the lowest risk for PHI cover, such as legal and medical professionals, can be among the most stressful.

The anomaly highlights that PHI cover can often involve more than just professional risk-factors alone. Women pay on average 50% more than their male counterparts. The differential is based on claims history and actuarial evidence. Women, in particular, should be encouraged to shop around as some insurers, particularly some friendly societies, will aim to minimise the differential as much as possible.

Not surprisingly fireman and skilled heavy industry workers are all also considered high risk, or &#39category C&#39. However many unusual professions are also considered the highest risk and require specialist advice to get the most suitable protection, these include: golf caddy, boilerman on a ship or a turf bookie.

Housewives/husbands may find it hard to get PHI cover, as they are classed as &#39not economically active&#39, i.e. do not receive a salary. However, where there are associated costs such as childcare costs, housewives and house-husbands may require income protection. In spite of this, cover for these roles varies widely, so shopping around for specialist advice is essential.

As PHI is not worked out from professional risk ratings alone, and other factors will increase or reduce premiums, Charcol is emphasising the importance of specialist advice. In addition, it is important that policyholders supply their insurer with all relevant details from the outset to avoid the risk of invalidating the policy. For example, accountants, considered one of the least risky of professions, may find their premiums rise if they travel abroad a lot with work. Hazardous pastimes such as rock-climbing could also have an impact on your risk rating.

Roderic Rennison of Charcol says: “Whilst it&#39s pretty obvious that a firefighter may have higher premiums to pay than a clerical worker, factors affecting the level of premiums aren&#39t always so easy to spot. For example, among the most common reasons for making a PHI claim are back problems and stress, all of which can as easily affect office workers such as accountants and solicitors, considered the least at risk.”

Charcol is offering customers an obligation free protection check, helping policyholders check whether their cover is the most cost-effective and suitable for their needs.