In 2022, members of the Association of Financial Mutuals (AFM) offering income protection products paid out £52m in claims to over 9,000 customers, up from £34m in 2021.**
Income protection insurance is a long-term policy designed to help you if you cannot work due to illness or injury.
Many people would struggle to be able to afford their lifestyle if they could not work.
It ensures you have an income until you are fit and able to return to work, no matter how long!
Some of the important facts to consider are as followed:
- It replaces part of your income
- It pays out until you can start working again
- There is often a waiting period before you can claim
- It covers most illnesses that leave you unable to work
- You can claim as many times as you need to (for as long as you still have the policy)
However, it is important to note that this is not the same as serious illness or critical illness cover (which will pay out a cash sum if diagnosed with a serious illness).
Furthermore, it also differs from short-term illness protection as this normally only lasts between 2 and 5 years.
So, a question people normally ask themselves is ‘Do I really need this?’.
The answer is usually yes!
It doesn’t matter if you don’t have children or other people dependent on your income, if you become ill and would therefore struggle to pay your bills income protection is definitely something you should consider!
It is also important to note that not all employers offer enhanced sick pay within their contract – and statutory sick pay is only £109.40 per week (in the 2023/2024 tax year), so you need to make sure you have a plan in place if you can’t work.
If you are self-employed you will not even have sick pay to fall back on, so it is especially important for you!
If this is something you would like to learn more about or have a look at the variety of policies you can apply for, do not hesitate to call us on 01323 436680!
**Figures taken from The Intermediary 13/04/2023 https://theintermediary.co.uk/2023/04/mutual-income-protection-providers-paid-over-50m-in-claims-in-2022
