Drewberry Insurance: Low-Start Income Protection Could Cost You Thousands

By Drewberry Insurance, PRNE
Sunday, May 15, 2011

LONDON, May 16, 2011 - Drewberry Insurance reveals how initially attractive 'low-start' premiums
for income protection insurance could end up costing thousands of pounds more
over the life of the policy.

When taking out income protection insurance it is very common for the
'guaranteed premium' option to be selected where the monthly cost remains
fixed over the life of the policy. However, some insurers only offer premiums
that increase with age, which are often referred to as 'low-start' premiums.

As the name suggests, with low-start premiums the monthly cost starts off
very low but increases significantly over time. When comparing the cost of
one income protection plan relative to another many consumers are naturally
drawn to the low monthly premium quoted. Some consumers are unaware that the
cost of these plans rises over time let alone realise the magnitude of these

For a large proportion of the UK workforce taking out a plan with
low-start premiums could cost thousands, and in some cases tens of thousands
of pounds more over the term of the policy, which usually runs until planned
retirement age. Caution and proper analysis really needs to be taken when
considering these plans.

Tom Conner, head of protection at Drewberry Income Protection
(www.drewberryincomeprotection.co.uk/), says, "Far too many consumers
are unknowingly taking out income protection plans where the monthly cost can
increase by more than five times over the life of the policy, which is a real

"Not only are there issues relating to long-term affordability, but the
simple fact is that an initially more expensive plan with guaranteed premiums
could result in huge savings over the policy life. If the premiums look
considerably lower than quotes from other insurers it is usually for a very
good reason, they increase significantly down the road."

Example of True Low-Start Cost

To provide one specific example, take the case of a 35 year old,
non-smoking, male accountant looking to protect GBP2,000 per month until age
65 with an 8 week deferred period.*

The lowest quote with guaranteed premiums taken from a range of leading
income protection insurers was GBP57.35 per month. One leading insurer who
only offers low-start premiums quoted GBP31.96 per month, which equates to an
initial saving of GBP25.39 per month.

However, the premiums with the low-start plan rise to a maximum of
GBP164.36 per month at age 58, relative to the fixed monthly cost of GBP57.35
with the guaranteed premium option. A premium level this high could cause
serious affordability issues for a vast number of households.

Over the entire life of the policy the total cost of the guaranteed
premium plan works out at GBP21,334.20, compared to GBP33,311.76 with the
low-start plan. Thus, the low-start income protection plan would cost as much
as GBP11,594 more over the term of the policy, equating to 54 per cent more
for cover. This clearly puts the initially low premium into perspective.

Notes to editors

Please note that information contained in this press release relates to
income protection policies (formally known as permanent health insurance)
rather than short-term accident and sickness insurance (

*Please see the following report for further information:


About Drewberry Insurance

Drewberry Insurance is a trading name of Drewberry Ltd, which operates as
a whole of market insurance intermediary in the health and protection
insurance markets. Drewberry Insurance offer insurance broking services for a
range of individual and group policies, through the following specialised

Drewberry Group Insurance (www.drewberrygroupinsurance.co.uk/) -
Informational resource for implementing group health and protection schemes
as part of an employee benefits offering.

Drewberry Mortgage Insurance (
www.drewberrymortgageinsurance.co.uk/) - Informational resource for
arranging mortgage protection insurance, such as life insurance and payment

Drewberry Health Insurance (www.drewberryhealthinsurance.co.uk/) -
Informational resource for arranging both personal and family private medical
insurance (PMI) plans.

Drewberry Ltd is an appointed representative of Chase Templeton Ltd which
is authorised and regulated by the Financial Services Authority, register
number 311612. Registered address: Vantage House, 1 Weir Road, London, SW19

    For further information please contact:

    Andrew Jenkinson
    Drewberry Ltd
    Vantage House
    1 Weir Road
    SW19 8UX





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