INCOME PROTECTION INSURANCE
You should seriously consider Income Protection Insurance if you are concerned about a potential lack of income if you were not able to work for a long period of time due to illness or disability.
If you have to make a claim then an income protection policy will pay out a regular tax-free monthly amount for the length of time you are sick or disabled.
You should be able to choose whether the payouts stay at a set level or rise with inflation. You should also decide how long you want the payments to continue if you need to claim, such as until your home loan or mortgage is paid off or until you retire.
However you may find that some policies will only pay out if you cannot work at all rather than being unable to do the job that you normally do. Policies from different suppliers will always vary so make sure you check the small print to find out what cover is really on offer.
Usually you will not be able to claim until after a built-in deferred period of a set number of weeks. So if you find you can return to work before the deferred period is over you will not receive any money.
In the UK you will find that Income Protection Insurance may also be referred to as Permanent Health Insurance (PMI), Long Term Disability Insurance or Income Replacement Insurance, but they all basically do the same thing.
Most insurers who offer these policies sometimes will cover up to a maximum of 75% of your income, but there are some who may only pay up to 50%. Try and find a policy with fixed premiums that do not increase, as you get older.
Self-employed individuals are more likely to find a need for income protection cover. If you are employed you may find that your employer my well cover you for prolonged sickness or disability, but make sure you check your contract of employment.
If you want a quote for this type of insurance then just call us.