Income Protection
Make sure your family, income and home is protected. Our advisers can walk you through what income protection is and why you may need it.
Income protection insurance and why should you take out a policy to protect your monthly wage? Income protection insurance provides you with a pay out if you’re unable to work due to illness or injury, and continues to do so until retirement, death or you can return to work. There are short and long-term policies, depending on your needs and budget, providing you with a way to maintain your lifestyle while you recover.
This type of policy differs from similar insurance products, such as Critical illness or Life insurance policies. There are various factors to consider when choosing an income protection policy, and it’s important to take your requirements into account to ensure you get the right level of cover.
It is important to ensure you have a safety net in place if you are diagnosed with an illness or have an injury, and can no longer work. Focus on resting up and recovering, whilst your income protection insurance helps you stay afloat financially.
- Regular Payments: The policy pays out in regular instalments, ensuring a continuous income stream.
- Long-Term Coverage: Payments typically continue until you can return to work, retire, or in the unfortunate event of death.
- For Everyone: Both employed and self-employed professionals can be covered.
- Peace Of Mind: Provides a financial safety net for homeowners, meaning you can still pay your monthly mortgage.
It can be difficult knowing how much income protection cover to take out, as you don’t want to underestimate your needs simply to keep the premiums low. But over-insuring unnecessarily can just be a waste of money each month. So, it’s understandable that a common question relating to this type of insurance is ‘How much income protection cover do I need?’
Consider how much you need each month in order to remain comfortable, so that you purchase the right level of cover. If you’re choosing long-term income protection, rather than short-term insurance related to a specific debt, consider all of your essential outgoings that will need to be paid for such as council tax, utility bills and food costs.
Remember that some outgoings you’d normally have such as commuting to work and work-related expenses won’t be an issue while you’re not working, so these can be removed from your expenses.
Bear in mind that an income protection policy can’t put you in a better financial position than you’re in when working, so insurers typically limit the percentage of your gross annual income in terms of what they will cover. But you might require less cover than the maximum your insurer will provide if your outgoings are lower than this, so understanding what your essential outgoings are is key.