Income Protection Guide
Like most of the people who work for a living in the UK, you are probably fairly dependant on having a regular source of income. It is estimated that the average worker in the UK could stay afloat financially for little more than two months if they were no longer able to work.
Before you fill out the income protection quote form below, take a minute to read over our income protection guide.
What is Income Protection insurance?
Income protection insurance is one way of ensuring that you will be able to provide yourself and honour your obligations if you should lose your main source of income because of unemployment, accident or sickness.
Income protection insurance will provide you with regular, tax free payments to substitute for your lost earnings. The payments you receive will be a set at a pre-determined percentage of what your earnings were before you needed assistance.
There are two basic types of income protection:
- Short term policies will provide you with cover for up to 12 months and is utilised by those who have become unemployed or suffered an accident that stops them from working. Most polices will pay up to £15,000 over those 12 months.
- Long term policies will cost you more in premiums but will provide with regular payments for as long as you are unable to work. As opposed to short term policies, the main concern for taking out a long term policy are related to health issues, as opposed to those of employment or accident related injuries
Do I need Income Protection?
To answer this question you will need to consider the following points:
- Will your current employer continue to pay you a portion of your salary if you are unable to work?
- If you are self-employed, will a loss in income seriously affect your standard of living?
- If you have any savings, how long will they last if you are not working, and potentially paying medical costs?
- Will you be able to keep up with your mortgage repayments?
It is worth remembering that anyone can become ill or be involved in an accident, while the intermittent rough patches the wider economy goes through can magnify the risk of unemployment periodically for many.
Am I eligible?
Most income protection policies will come with a set of eligibility criteria. Some examples may include:
- You must be a permanent resident of the UK
- You must work within the UK and have been continuously in work for a set length of time before making a claim
- You must be working on the date that your cover begins
Are there usually any policy exclusions?
Most policies will come with list of exclusions by which you will not be valid in making a claim on the policy. It is vitally important to make sure you read these lists so that you are not caught out in the future. Some examples of policy exclusions are:
- You will generally not be covered for any pre-existing medical conditions you have suffered from before the start date of the policy
- For long term income protection you will not be allowed to make a claim if you are being made redundant
- If you have lost your job through breaching your contract or other forms of misconduct
- If a fixed term contract expires after less then 2 years
- If the accident or injury that means you are unable to work is self inflicted or the result of alcohol or drug abuse
If you are interested in obtaining an income protection quote, quickly fill out the form on this page.
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