Much like a redundancy package, designed to help you cover regular outgoings until you find other work, income protection insurance ensures that things like your mortgage or rent and household bills are covered if you are unable to work due to illness or injury

But with various policies out there and particular requirements to consider, we’re here to guide you through everything you need to know about income protection insurance, why it’s as important as redundancy cover, who should consider it and how to choose the right policy for you.

What is income protection insurance?

This kind of cover gives you a replacement income whilst you’re not able to go to work due to an illness or injury, taking the pressure off, and allowing you to focus on getting better and getting back out there.

Unlike critical illness cover which is paid out in one lump sum, it provides regular payments that replace part of your income until you’re able to start working again. These payments are usually in the range of 50-70% of your usual wage and can be used to keep up with your usual monthly outgoings. Let’s take an example. A 32-year-old office worker who has no existing health conditions and doesn’t smoke for just £33.24 a month, they could earn a long-term income of £1,250 a month*.

Who should consider income protection insurance?

If you are in full-time employment do not assume that you are fully protected, different employers provide different benefits packages, so it’s worth speaking to your employer first and finding out what, if any, sick pay you are entitled to.

For all you self-employed, small business owners and tradespeople. Much like redundancy cover, unless you have a specialist policy, more often than not, you are not entitled to sick pay. This means that should the worst happen; you won’t have a regular income coming in. We’d recommend that you in particular look into getting an income protection insurance policy.

Things to consider when applying for income protection insurance

The cost of your monthly premiums will depend on the policy and your circumstances. Income protection policies cover a wide range of illnesses, conditions and situations. So, it’s important to compare what different insurers can offer you. The cost is affected by:

  • Your age
  • Your occupation
  • Whether you’re a smoker
  • The percentage of income you’d like to cover
  • The deferral period (the period of time from the day you can’t work until your start receiving payments)
  • The range of illnesses and injuries covered
  • Your medical history

The cost of your payments will also depend on whether you pay:

  • A standard premium – which an insurer can increase over time
  • A guaranteed premium – which remains fixed for as long as you have the policy. They can be more costly in the short term but can offer better peace of mind.

Premiums can vary and different insurers can confusingly use different criteria. Call today on 01609 773 748 and our team of specialist insurance brokers will help you find the right income protection insurance for you.

No time to talk just now or looking out of hours, fill out our quick quote form or request a call back and our team will call you at a convenient time.