Income Protection?
What is it and do I need it?

How would you pay the bills or your mortgage/rent if you were sick or accidentally injured and couldn't work?

Every year nearly a million people find themselves unable to work due to a serious illness or injury (according to the ABI). Could you manage on statutory sick pay? At £88.45 per week this is unlikely to cover your bills. Would this potentially wipe out your savings?

The aim of income protection insurance is to provide an income to help replace any loss of earnings due to ill health or accidental injury.

• It replaces part of your income if you are unable to work as a result of illness or disability.
• It continues to pay until you are able to return to work, or retirement, or death, or the end of the policy term – whichever is sooner.
• It covers most illnesses that leave you unable to work (depending on the policy conditions)
• You can claim as many times as necessary throughout the duration of the policy.

It is not the same as critical illness insurance which pays out a lump sum on diagnosis of a specified critical illness.

So, who needs income protection?

You are most likely to need this benefit if you are employed or self-employed and do not have sick pay to fall back on. It doesn’t matter whether or not you have children or dependents – if you would be unable to pay the bills as a result of sickness you should consider income protection!

It may also be a consideration if you are single with a mortgage or rent as the continued income will cover this expense.

What are the benefits?

• Tax free income (if your own policy)
• Payable until the end of the term or until you return to work
• Peace of mind
• Secure income
• No urgency to return to work until fully recovered
• Income paid directly to the policy holder

What can it be used for?

Any income received from the policy can be used to cover your existing out goings for example mortgage repayments, rental and bills.

What is the cost?

The cost will depend on the policy and your circumstances – everything depends on getting the right policy so it is best to seek advice!

A number of factors are considered including:

• Age
• Job
• Smoking status (although some insurers are disregarding this)
• The % of your current income you wish to cover
• The deferred period (the length of time before the policy commences payment)
• health

So, if you would like to discuss income protection and want a protection quotation, or if you would like to review your protection requirements give us a call.