In the modern world many individuals have a portfolio of personal protection policies. These policies may include family protection life insurance, mortgage life insurance, critical illness cover, income protection and mortgage payment protection. Many individuals take out these policies from a number of different insurers and this might be the most appropriate and cost-effective method. However, most leading UK insurers will also offer a multi-benefit (or multi-product) discount if all policies are taken out with them under one protection account/plan.
Although it might work out cheaper to shop around for separate policies (or use an insurance broker to check for you) it is worth comparing the cost of a multi-line account as savings could be made. For example, Scottish Provident recently released an example of the savings that could be made with their multi-benefit protection plan relative to taking out separate policies. The example looked at an average individual with life insurance, critical illness cover and income protection insurance. The cost (with Scottish Provident only) of taking out these policies separately came to £106.43 per month compared to a combined total of £100.18 per month if taken out as part of a protection plan. Thus, by combining the policies under a multi-benefit plan savings of £6.33 per month (or £75.96 per year) could be made.
Admittedly, these are not the largest savings in the world but there is still no point in overpaying for exactly the same insurance cover, even if it is by around £75 per year. The other real benefit of a multi-product protection account is that it only requires one application, rather than three or four separate applications.
In summary, there are definitely benefits of comparing the cost of a multi-product protection plan relative to taking out separate policies as savings could be made and there is also an increased amount of application ease. It should be noted, however, that the same insurer rarely comes out the most competitive for each product so it really is important to compare that cost of separate policies with different providers, as well as the cost of protection accounts with different providers (you can use an insurance broker to do this).
Although this example relates to life insurance, critical illness and income protection, it is also possible to take out a protection account that includes mortgage life insurance with critical illness cover and mortgage payment protection as part of a ‘mortgage protection’ account.