The Budget 2015: How this affects your insurance policies

The Budget 2015 has a number of implications to insurance policies that are available in the market today.

The good news is that the hike in Insurance Premium Tax will not have any bearing on Life Insurance, Critical Illness Cover or long-term Income Protection plans!

Mr Osborne has increased Insurance Premium Tax from 6% to 9.5% as of November 2015, which will affect the following general insurances:

• Home insurance
• Car insurance
• Private medical insurance (PMI/PHI)
• Accident, Sickness and Unemployment Cover

Whilst this will be frustrating to many, if not everyone, it is something that will be put in place across the whole insurance market for these products. The important thing to remember is how vital some of these insurances are to protect yourselves personally and in some cases legally.

Income Protection Insurance for Company Directors

Whilst the new Insurance Premium Tax will not impact upon the premiums paid for Income Protection, changes to the taxation of dividend income will have implications for Company Directors with Income Protection policies.

Now that dividends are going to be more highly taxed it is possible that some Company Directors may reduce the amount of dividends they take each year. If this does happen you should check your Income Protection policy as you could become overinsured. This will result in you paying for an Income Protection policy with a benefit that is higher than you would be able to place a successful claim upon.

We would strongly recommend that if you are a Company Director with an existing Income Protection policy, that you review your cover if your income level or structure changes in any way.

Existing Accident, Sickness and Unemployment Insurance premiums will increase

Accident, Sickness and Unemployment policy premiums will increase when the new Insurance Premium Tax comes into place. Even though we are sure this will not be a welcome change it should not stop you from keeping a valuable insurance in place that still has the same benefits as before. It is also worth bearing in mind that most Accident, Sickness and Unemployment insurance premiums have the potential to increase every month so you should regularly check your policy to make sure that it remains affordable to you.

Final Points

We have provided a very brief overview as to how The Budget 2015 could impact upon some insurance policies. If you find that your insurance policy premiums change after November 2015 then it is worthwhile reviewing your cover to ensure that is still meets your needs and suits your individual circumstances.

If you would like any help or advise with one of the insurance products mentioned then please feel free to contact one of our qualified advisers on freephone 0800 567 7450 or head straight over to our quote engine.