What will income protection cover me for?

Have you ever thought about how you would pay your mortgage or rent and other essential outgoings if you lost your income due to an accident or serious illness? An income protection insurance policy will give you a regular income until you’re able to return to work again, retire or reach the end of the term.

If your employer will move you onto Statutory Sick Pay before you can return to work or if you’re self-employed and aren’t entitled to sick pay, income protection can provide the financial cushion you need to keep your important living expenses covered.

If you don’t have enough savings to support yourself during a prolonged sickness absence or you can’t manage on government benefits or financial support from your family, an income protection insurance policy will give you the peace of mind you need until you’re well enough to work again.

The key facts about income protection insurance

• Income protection insurance makes regular payments to you if you’re unable to work due to an accident or sickness.
• Policies cover most short and long-term illnesses that prevent you from working – your policy will define exactly what you’ll be covered for.
• Most policies will pay you between 50% and 65% of your usual income if you can’t work.
• There are two main times of policy to choose from – standard premium policies can increase over time while guaranteed premiums are fixed for the term of the policy.
• You can make as many claims as you need to all the time your policy remains in force.
• Most policies have a waiting period until your payments begin – usual waiting periods are 4, 13, 26 weeks and one year. The longer the waiting period you select when you take out your policy, the lower your monthly premiums will be.

The costs of an income protection policy will depend on the type of policy you take out, the term, the percentage of your income you’d like to cover, the waiting period you choose and the injuries and illnesses you’ll want to be protected for. Your personal circumstances will also influence your policy premium – your age, occupation, health and habits, such as smoking and alcohol intake, will all be taken into account.

The best way to decide which income protection policy is right for you is to call Mortgage Decisions on 03454 500200 to talk to a protection expert.