Income Protection Insurance

What is income protection insurance?

Income protection insurance is a policy designed to give you peace of mind if you ever fall ill, suffer a serious injury or lose your job. If you were ever in this position and couldn’t live off your sick pay or savings, income protection can play a huge part in securing yours and your families future. In short, this type of policy covers you financially and ensures you continue to receive an income until you either return to work or retire.

What types of income protection insurance are there?

(PHI) Permanent health insurance – this differs from private health insurance. PHI allows you to protect a proportion of your income. This is often set at 50% of your salary. It can pay out until you either reach retirement or choose to take early retirement. 

Accident and sickness cover – if you suffer an illness or injury resulting in you not being able to work, it will provide you with financial cover allowing you to pay your monthly outgoings until you’re fit enough to return to work. 

Unemployment cover – in the unfortunate event of you losing your job, this cover provides you with a steady income. Once you have left your role you’ll receive a tax-free monthly income.

(ASU) Accident, sickness and unemployment cover – this is a combination of all of the above. It’s a 360 degree cover which will give you total peace of mind.

Does everyone need income protection insurance?

Most people presume they only need this added level of insurance if they have children or dependants, however, this isn’t the case. If illness, injury or redundancy meant you couldn’t pay your bills and living expenses, you should seriously consider income protection insurance.

There are some instances where you might not need this type of protection. For example,

  • If you can get by on your employee sick pay benefit alone (if you have this benefit)
  • You could survive and cover your outgoings on government benefits alone
  • You have enough savings that could see you through the rest of your life
  • You have the option to take early retirement and could afford to do it
  • You have financial support from family

Income protection

How much does it cost?

There are various circumstances and lifestyle factors that will determine the amount you pay each month for your cover such as;

  • Your age
  • Your job
  • Whether you smoke or have previously smoked
  • How much percentage of your income you want to cover
  • Your current health
  • Your weight
  • Your family medical history
  • The rage of illness and injuries covered

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