If you're unable to work due to sickness or accident, Income Protection Insurance will pay you a regular tax-free income, whether you're employed or self-employed. You can claim as many times as you need to, during the term of your policy depending on conditions.
These policies pay an on-going, regular payment of up to 65% of your monthly earnings throughout the term of the policy, so you can be reassured to cover your main outgoings, until you are well enough to go back to work.
Income protection will pay out until you can work again. Depending on the type of policy, if you could never work again (due to accident or sickness) you could be paid out until your pre-determined retirement age.
There are a variety of cover types, for everyone's budget and circumstances,
Level cover - The amount of cover you choose is fixed during the life of the policy. This means it won't keep up with inflation and may get you less in the future.
Inflation linked - The amount you are covered for will increase in line with inflation. The premium you pay will go up each year decided by the insurer and using the Retail Prices Index.
Guaranteed premiums - Basically, your premium is guaranteed (will not change), unless you have chosen inflation-linked cover.
Reviewable premiums - Don’t change within the first 5 or so years of your policy, depending on the provider. After that they could change every year.
Short-term or budget cover - Generally a more affordable option. You can only claim for a pay-out in the first 12 or 24 months (depending on what you choose) You can still make multiple claims but it is more restrictive and may be only available with guaranteed premiums.
Comprehensive cover - This will cover you if you are unable to work because of accident and sickness for your chosen term, or you retire or you are well enough to go back to work.
Why may you need Income Protection?
Income Protection has many benefits such as giving you some reassurance that you and your family don’t need to suffer any financial burden of you being unable to work.
No matter whether you are self-employed or work for a company, if you depend on your income to pay for everyday bills and other finances, you should seriously consider Income Protection. Generally, if you get very little to no sick pay from your employer, an income protection claim payout will fill the gap left between your regular income and any sick pay.
If you are the sole breadwinner at home, or you actually couldn't afford to pay the bills without a full wage, then we'd advise you get Income Protection.
Your policy will pay a proportion of your lost earnings, so you can concentrate on looking after your health. You can choose when your payments start and how long they last. It can give you that peace of mind if you're unable to work because of an accident, sickness or ill-health.
This money can minimise the impact that ill-health or injury affects your family. It can be used to support your lifestyle and financial commitments. Meaning you don’t have to miss out on the things you and your family enjoy.