Income Protection.

Income protection is a policy designed to protect a percentage of your income (usually 50-65%) should you find yourself unfit or unable to work due to sickness or injury during your policy's term. It pays a proportion of your lost earnings, which could help you to cover your monthly outgoings and ultimately allow you to focus on getting better. It's not the same as critical illness cover, which pays out a one-off lump sum if you have a specific serious illness.

Do you need income protection?

Consider what financial responsibilities you would still need to pay should you find yourself unable to work for a while due to sickness and/or injury. Would you be able to cover your bills using statutory sick pay? If you don't have savings to fall back on then getting cover could be worth thinking about. Income protection may not be suitable for you if;

  • you have enough savings to support yourself (keep in mind that your savings may need to support you for a prolonged amount of time)
  • your partner or family would support you financially
  • you could get by on sick pay/ government benefits
  • early retirement is an option for you.

The costs (premiums) for income protection can be high and you may never need to use it. You won't get your money back if you don't need to claim.

How much does income protection cost?

This will depend on the policy and your circumstances.

The cost is affected by;

  • your age
  • your occupation
  • your current health
  • whether you smoke/ have smoked
  • the percentage of income you want to be covered
  • the 'deferred' period until the policy pays out
  • the range of illnesses/ injuries covered
  • premium type (standard or guaranteed).

What is meant by 'deferred period'?

There is often a pre-agreed waiting time before a policy will pay out, this is known as the 'deferred period'. The longer you defer for, the lower the premiums will be. The most common deferred periods are 4, 13, 26 weeks and a year.

Ready to speak with a protection adviser?

Give us a call today or drop us a quick message here and we'll be more than happy to help.

01843 228800