IP SOM

How long will you last without a regular income?

Each year one million people in the UK find themselves unable to work due to a serious illness or injury (Association of British Insurers 2017). Income protection insurance is designed to give you some cover if you can’t earn an income for those reasons. If something happened to you would you be able to survive on savings, or on sick pay from work?

Income Protection isn’t the same payment protection insurance (PPI). Where PPI covers a specific debt and any payments go to your lender, Income Protection hands you a tax-free proportion of your income if you’re unable to work. A survey quoted by Which said that less than a quarter of people deemed protecting their income to be essential, compared with 74% who said the same of needing access to broadband internet. Which went on to say that “the one protection policy every working adult in the UK should consider is the very one most of us don’t have – Income Protection.”

If you have substantial savings behind you then all may be well. You might be able to take early retirement, or your partner or family may be able to support you. But for most of us these aren’t an option, so some form of Income Protection then becomes a necessity.

Income Protection insurance is a long-term insurance policy designed to help you if you can’t work because you’re ill or injured. It ensures you continue to receive a regular income until you retire or can return to work. It covers most illnesses that leave you unable to work, either in the short or long term although this can depend on the type of policy and its definition of incapacity. It pays out until you can start working again, or until you retire, die or the end of the policy term whichever is sooner. You can usually claim as many times as you need to, while the policy lasts. There can be a waiting period before the payments start, usually after your sick pay or other insurance ends. The longer you wait, the lower the monthly premiums.  There are Budget Plans that will cost less each month.  These will pay the monthly benefit for a restricted period; some form of protective insurance is better than none at all.

It doesn’t matter if you have children or other dependants you may rely on, if illness would mean you couldn’t pay the bills, you should consider Income Protection insurance. You are most likely to need it if you are self-employed or employed and you don’t have sick pay to fall back on. If you would like to look at protecting your income get in touch if for some advice.

 

 

 

 

 

 

“Payment Protection Insurance is optional.  There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income”

 

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