Income Protection

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What is Income Protection insurance?

Income Protection is an insurance designed to pay you a monthly benefit if you become unable to work due to sickness or injury. This type of insurance can be arranged for those who work for an employer or are self-employed.

Typically this insurance can provide a benefit of up to two thirds of your income at the point of any claim, and will continue to pay this amount until you are well enough to return to work or until the end of the policy term if for example you never recover enough to be able to return to work.

‘Short-term’ income protection is normally a cheaper alternative to a standard policy. A short-term income protection policy works under similar principles to a standard one, but with the continuous period a benefit could be paid for if you became ill and unable to work typically limited to a maximum of two years.

Do I need Income Protection?

One way to answer this is to think about how you and your family would cope with everyday expenses if you became too ill to be able to work:

Would you receive any employee benefits from your workplace – how much and for how long?
Do you have emergency savings? How long would these last?
Would you be eligible for government benefits? How much would these actually provide?

How does Income Protection work?

Once cover is in place, you can be confident that, should you become unable to work due to illness, you will be able to claim a benefit that can help you and your family with ongoing household expenses, leaving more time for you to recuperate and focus on getting well enough to return to work again.

When assessing a claim, insurers would usually require the following information:

What illness you are suffering from and how this has impacted your ability to be able to work
Evidence of your illness (e.g. a sick note / letter from your GP recommending you take time off work)
What your level of income was at the point you became ill and evidence of this
Whether you have or will be receiving any other income whilst you are ill (e.g. sick pay from employer, income from any other income protection policies you have)

After a set period of time (a deferred period) if you are still ill and unable to return to work, you can expect the insurer to begin paying you a monthly benefit until one of the following takes place and whichever soonest: you are well enough to return to work, the overall policy term ending, a limited benefit period ending or death.

Depending on the term and type of policy you have, you can expect to still remain covered even after you have claimed a benefit then gone on to return to work. This means that should you suffer another illness again in the future that prevents you from being able to work, you could claim on your policy again.

How much does Income Protection insurance cost?

The cost of income protection depends on various factors. The factors that can affect the cost of a quote are:

How much benefit/cover you are requesting
Your age, term of policy, and your occupation
Whether you are a smoker or non-smoker
Any medical/health issues you currently have or have had previously
What deferred period you have selected (the period you’d need to be continuously ill and unable to work for before an insurer would start paying a benefit to you)

Please contact us or request a call back to discuss your requirements and receive advice and a quote to address your income protection needs.