What is...income protection?
In 2019 over 16,000 people claimed on an income protection policy, with an average paid claim value of £17,728.**
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 follows:
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 £96.35 per week (in the 2021/2022 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 contact us.
Call us on 01323 436680
**Figures taken from ABI 7/5/2020