What is Income Protection
When talking to your mortgage broker to secure your mortgage, you may well have discussed the option of “Income Protection”, but what is it, and why would you want it?
Formerly known as permanent health insurance, income protection is an insurance policy that pays out if you’re unable to work because of injury or illness. Income protection usually pays out until retirement, death or your return to work, although short-term income protection policies, which last for one or two years, are also available at a lower cost. Neither income protection or short-term income protection pays out if you’re made redundant – but they will often provide ‘back to work’ help if you’re off sick. Income protection is different from critical illness insurance, which pays out a lump sum if you fall seriously ill.
Why do I need Income Protection?
Many employers do not offer support financially if you are off sick for longer than a year and with living expenses stacking up and benefits not likely to pay out a significant enough amount to cover those expenses, being out of work with no income could leave you struggling and having to make difficult decisions about your finances.
Many of us secure other forms of ‘protection’ such as critical illness cover, or Private Medical Insurance, but not all of these policies will be applicable where we are off sick for an extended period of time and struggling to fund our expenses that are usually drawn from our incomes.
Many factors need to be considered when securing the right cover for your situation, and we all know that costs is usually the foremost factor in deciding if it’s for you.
It is best to speak to an adviser who can look at your situation and advise the most suitable policy for you. But factors such as whether or not you are a smoker, your job type (i.e. office work, or manual labour) and the level of cover needed will all affect what you pay, but it may be more affordable than you think- and important too!
Speak to us to find out what Income Protection we can sort for you >>