Income Protection Insurance
In the event that you fall ill or sustain an injury that prevents you from being able to work, you want peace of mind that your wages will be protected and you’ll still receive an income. With income protection, your income will be protected in these instances.
What is income protection insurance?
Income protection (sometimes known as permanent health insurance) is as self-explanatory as it sounds. It’s a long-term insurance policy that is designed to protect your income in the event that you can’t work due to falling ill or injured.
When you invest in income protection insurance, you can continue to receive a regular income until you retire or are able to return to work.
Advantages of income protection insurance
Income protection insurance can provide a real financial lifeline if you can’t work due to becoming ill or disabled as it can replace part of your income. Income protection also pays out until you start working again, retire, pass away or when it reaches the end of the policy term.
Income protection also covers most illnesses that leave you unable to work in the short or long term, depending on the type of policy and its definition of incapacity – which is why it’s crucial to make sure you are familiar with the terms of the policy. Also, you can claim as many times as you need to whilst the policy lasts.
Do I need income protection insurance?
According to the research conducted in 2017 by the Association of British Insurers (ABI), one million workers find themselves unable to work due to a serious illness or injury. When the statistics are that high, income protection may be worth considering.
It doesn’t matter if you have children or other dependants, if you fall ill and it would make you unable to pay the bills, you should consider income protection insurance. Also, if you’re self-employed or employed and you don’t have sick pay to fall back on, you’re most likely going to need income protection to cover your missed income.
Also, if you do not have adequate savings in place to cover you and your family for the time that you’re off work, income protection might be a worthwhile investment. Statutory Sick Pay only provides £94.25 a week and you can only receive it for up to 28 weeks. With income protection, you’ll be receiving monthly payments that mimics your wages, to provide you with financial peace of mind.
Things to consider with income protection
With every financial commitment you make, it’s vital to make sure that you are familiar with every aspect of it. With income protection it’s important to bear in mind that there’s often a waiting period before the payments start. Generally, you set payments to start after your sick pay ends or after any insurance stops covering you. The longer you wait, the lower the monthly premiums. Income protection is also not the same as critical illness cover, a policy that pays out when you fall critically ill with an illness specified in the policy.
Find out more about income protection
When it comes to income protection insurance, everything depends on making sure that you get the right policy and we highly recommend that you get advice from experts in insurance products – like us. Get in touch today to find out more.