What Is Income Protection Insurance?
Income Protection insurance can be thought of as Sick pay that you pay for yourself. You pay a monthly premium, and if you are unable to work due to illness or injury, you can make a claim.
This type of cover can be really beneficial if you do not receive Full Sick pay at work, or only receive full sick pay for a limited amount of time.
Income Protection has what is referred to as a deferred period. This deferred period is how long before your policy starts. It can generally be anything from 1 week to 52 weeks. It may be limited by your occupation to a different amount though.
Do I Need Income Protection Insurance?
You may want Income Protection insurance if you do not get full sick pay indefinitely at work. Most jobs now do not include full sick pay long term as standard, and this has led to people seeking their own protection.
If you were unable to work, you are unlikely to be able to pay your bills, your rent, or your mortgage.
This is why a lot of people want Income Protection Insurance. To ensure they are financially sound if they are unable to work due to illness or injury.
How Much Is Income Protection Insurance?
The cost of income Protection will vary depending on your occupation, age, smoker status, medical history etc.
There are also lots of different policies and providers out there. Generally most providers will have 2,3,4 or more different income protection policies available, each with a different cost.
Speak to our live chat if you would like more information on the costs of Income Protection Insurance.
What Does Income Protection Cover?
Unlike Critical illness cover, Income Protection does not tend to have specified illnesses. Rather it will cover you if you are unable to perform your job due to illness or injury for longer than a specified amount of time.
Some Income protection policies may require you to not be able to perform a set task, like walking up a flight of stairs, rather than not being able to do your job. This would likely depend on your occupation.
How Much Income Protection Do I Need?
Most providers will let you insure yourself for between 50-60% of your gross income. It will depend on the provider what level of Income protection you can get. Income protection payments tend to be tax free, so 50-60% may go further than you think.
Speak to our Live chat to see how much you may be able to get.
Is Income Protection The Same As Ppi?
No, Income protection is not the same as Payment protection insurance.
Payment protection insurance pays your monthly commitment to that lender if you are unable due to illness. Income protection pays you a monthly amount set by you. What you choose to do with it is ultimately up to you.
Does Income Protection Cover Redundancy?
Generally Income Protection does not cover redundancy. Income Protection usually pays out if you are unable to work due to illness or injury.
You can potentially get unemployment cover, however, it would be a separate policy usually.
Do I Need Critical Illness And Income Protection?
Critical illness cover is generally designed to pay out a set amount for a set purpose on diagnosis of a specified illness.
Income Protection usually pays out a monthly amount to replace your income if you are unable to work due to illness or injury.
Is Income Protection Insurance Worth It?
Whether an insurance is worth it or not is really up to the person taking out the policy. However, when given the likelihood of being off work at some point before they retire, most people would say that it is entirely possible they may not be able to work at some point due to illness or injury.
Of the types of insurance we provide advice on, Income Protection is one of those most claimed by people with a policy.