Protect yourself against losing your income through injury, illness or
disability and optionally unemployment
- Income Protection Insurance protects your income
- Income Protection Insurance is the first insurance you should buy
- Income Protection Insurance pays out when you can't work
- Income Protection Insurance pays out when you are sick or disabled
- Income Protection Insurance is long term and short term cover
Ask any expert and they will tell you that Income Protection is the most basic and essential protection of them all. It's the cover that covers the thing that pays for everything. If you think about it, without your income, or perhaps your partner's income, your finances are ruined, at least if that loss lasts for more than a few months. So don't insure your car, your boiler, your pet or life before you protect your income!
The best policies – and advice is essential in buying such an important cover – provide a tax-free monthly amount until your retirement date. To reduce your premium the cover starts paying out after you have been signed off work for a time. This is not cover against a bad cold after all and the longer you set this at, the cheaper the cover becomes. Most people opt for a 3 month wait and plan to cover that gap from savings or help from family, friends or employer. You can check the cost for longer or shorter waits and also save money by reducing your retirement age or opting for a shorter term policy.
Everyone should have this cover, because the State simply does not provide adequately for those who can't earn and it is a real possibility for us all as the above statistic show. Some employers provide this cover (we think all should!) so check with yours, but for the self-employed or for all those whose work is caring for others, this cover is vital.
You can have payments increase during a claim, and the maximum level you can buy is normally half your current income, as the insurers want you to be incentivised to try and get better and back to work. Though because the payment is tax-free the result is not far short of your net income normally. Income protection covers you against disability and sickness, but you can opt for an additional unemployment cover too.
Don't confuse proper Income Protection with the many lesser types of policy that are often sold under the same name. These never pay out for longer than 2 years - normally it's 1 year only – and are also known as PPI, Accident, sickness and unemployment (ASU) or similar.
WATCH OUT!
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