Case Studies
Case study 1: Unemployment only & 3 month option
Gareth Wood is 25. He earns £30,000 a year working in IT and his net income* is £1,500 per month. His wife Caroline is 24 and they are expecting their first child.
Caroline has decided not to return to work after the birth. If, because of an accident or sickness, Garth were unable to work, his employer's scheme would pay his salary for a generous period. However, if he were made redundant, Gareth would receive only a single month of salary in lieu. In these circumstances, Gareth has a need for unemployment cover. Gareth and Caroline have a mortgage of £90,000 costing £500 a month.
Each month they also make car loan payments of £100 and
pay £50 off their credit card balances. Utility bills and other expenses
bring their total outlay to £800 per month. Their lives are about to
change and Gareth is feeling the pressure to keep his salary coming
in to care for his family. They therefore decide that Gareth should
obtain Income Protection. At first Gareth considered obtaining separate
mortgage, loan and credit card payment protection but that meant finding
three different policies. In addition, these policies protect only the
monthly repayments and not the additional outgoings Gareth will be responsible
for. However,
Gareth has desirable
skills and so was confident of a rapid return to work. With this in
mind, he didn't want to pay for unemployment cover he would never use.
He searched the market and found a company that offered the flexibility he wanted - AntInsurance. They offered him the choice of cover for 3 or 6 months of unemployment payments per claim (as well as the standard 12 months). Gareth chose the 3 months option and arranged for cover of £1,125 per month - taking advantage of the maximum allowable of 75% of his net income*. The cost to Paul for his cover of £1,125 per month was just £6.75 a month and his current rate will not increase according to age for the duration of this policy. * Monthly salary less tax and National Insurance contributions
Case study 2: Accident, Sickness & Unemployment and Return to Work Benefits
Steve Foreman is 30. His net income* is £1,360 a month as an employee in food manufacturing and his job can be physically demanding. Having researched the market, Steve took out Income Protection with AntInsurance to protect his monthly income against accident, sickness and unemployment (ASU). Steve took the option of a maximum benefit period of 12 months per claim. He insured himself for £1,020 a month - taking advantage of the maximum allowable of 75% of his net income*. Steve was painting at home one day when he fell off his ladder breaking his leg and injuring his back. For the first four weeks Steve's employer paid him his usual salary. However, after this he was placed on statutory sick pay of £70.05 a week - the standard rate since April 2006. Steve's claim payments from his AntInsurance policy protected his income.
After six months, Steve had recovered sufficiently for his doctor to certify him fit for work but he was not yet physically capable of doing his previous usual job. To help ease him back in to work, Steve's employer offered him a part-time office job. He was delighted to accept the offer. However, his part-time net monthly income was just £540 per month. Steve therefore contacted AntInsurance and they placed him on their special 'Return to Work Benefits' scheme.
Rather than stop all benefits once a customer returns to work (as is common elsewhere), AntInsurance paid Steve the difference between his maximum allowable monthly benefit of £1,020 per month and his part-time net monthly income of £540 i.e. an extra £480 per month. Steve continued to improve and after a further three months he had fully recovered and was able to return to his previous job on full pay.
At the age of 30, Steve's premium totalled just £21.42 a month for ASU Income Protection. Steve continues to be covered through to the statutory retirement age and his current rate will not increase according to age for the duration of the policy.
Had Steve taken the Accident & Sickness only option he would have received exactly the same benefits as above and his premium would have been just £13.77 a month but Steve likes the extra peace of mind provided by the full ASU option.
* Monthly salary less tax and National Insurance contributions
Case study 3: Full Accident, Sickness & Unemployment and Temporary Return To Work
Rachel Black is 25, single and employed in advertising. Rachel has no family to support, no mortgage and lives at home. Nonetheless, Rachel is in debt. She has reached her credit card limit, has a car loan and car expenses, three store cards and a student loan to repay. In the circumstances, Rachel decided to play safe and obtain Income Protection against accident, sickness and unemployment (ASU).
Although she could have covered any amount up to her maximum*, Rachel felt she didn't want to be insured for the full amount. She felt that if she lost her job she would require cover just to meet her monthly payments - and put her social life on hold until she found work.
AntInsurance offered Rachel the choice of 3, 6 or 12 months of benefit payments - each up to her maximum*. Rachel knew she would easily find work within a year but thought 3 months was a little too short to be sure of finding another job. Rachel therefore chose the 6 months option and benefits of£600 per month - about half her net income**. Her premium for ASU Income Protection was just £8.70 a month and her rate will not increase according to age for the duration of the policy.
Rachel lost her job and received £600 per month. However, after the second payment Rachel had the chance of temporary summer bar work. She thought it would be a good idea to keep active and 'buy time' whilst waiting for a permanent advertising job to come up. Rachel notified AntInsurance. Payments were suspended while Rachel worked during the summer after which she re-registered at the job centre. Her AntInsurance payments then began again as if there had been one continuous claim.
Had Rachel taken the Unemployment only option she would have received exactly the same benefits as above and her premium would have been just £4.80 a month.
* 75% of net monthly income up to a maximum of £2,000
** Monthly salary less tax and National Insurance contributions
Case study 4: Transfer from another payment protection policy
Raymond Delauney is responsible for a mortgage and a personal loan taken out through his bank several months ago. Each of the loans had payment protection insurance incorporated into them in order to protect the payments if he became unable to work. As part of a more general financial review, Raymond decided to re-assess his current arrangements and calculate just how much protection he actually required. He found that his outgoings - utility bills, community charage, credit card payments, car expenses, food and general living costs - significantly exceeded his current level of cover. This stark conclusion prompted Raymond to worry about how his family would survive if he couldn't work.
Raymond contacted his bank to alter his existing arrangements. However, because the amount each policy paid out was capped at the level of the respective repayments he could not arrange an increase.
Raymond researched the internet for help and found AntInsurance. They offered him an alternative type of cover called Income Protection. With this different method of cover, Raymond was able to protect not just his monthly mortgage and loan repayments but all his other outgoings as well. Because the policy is not tied to any mortgage or loan agreement, Raymond was also free to decide for himself where to spend any benefits paid out. The rates were so competitive that Raymond arranged more than double his current monthly cover and still paid less in premiums than he paid to his bank. Raymond then cancelled all his prior protection products. In addition, subject to eligibility, Raymond may receive a waiver of the initial exclusion period.
Download PDF version of this page