Income protection

Key features

• Regular Payments: Replaces part of your income, typically up to 70%, if you’re unable to work. 
• Duration: Pays out until you can work again, retire, die, or reach the policy term’s end—whichever comes first. 
• Coverage: Includes most illnesses that prevent work, whether short or long-term, depending on the policy. 
• Claims: You can claim multiple times throughout the policy’s duration.  

What is deferred period?

There’s usually a pre-agreed ‘deferred’ period which is the waiting time before your income protection insurance starts paying out benefits after a claim. Longer waiting periods generally mean lower monthly premiums. 

When do you need income protection insurance?

Many people assume their employer will provide income if they’re unable to work. However, employers often only provide Statutory Sick Pay for up to 28 weeks. Beyond that, support is rare, especially for over a year.  Find out more about SSP

Considerations

• Employer Support: Verify what your employer offers if you’re off work due to illness. 
• Self-Employed: If you’re self-employed, you might not have any sick pay to count on. 
• Savings: Depending on your savings, the loss of income can quickly affect your ability to pay essential bills. 

Cost of income protection

The cost of income protection insurance varies based on several factors. It’s important to compare different insurers and their offerings to find a policy that suits your needs and budget. 

Factors affecting cost

• Age: Younger individuals usually pay lower premiums. 
• Occupation: Jobs with higher risks might result in higher premiums. 
• Smoking Status: Smokers typically face higher premiums. 
• Coverage Amount: The percentage of income you wish to cover. 
• Waiting Period: Longer waiting periods can reduce monthly costs. 
• Health: Current health, Medical history, weight, and family medical history. 

If you have pre-existing health conditions, certain illnesses might be excluded from a new policy or could result in higher premiums. 

Choosing the right policy

Premiums can differ significantly between insurers, so seeking advice from a protection adviser is beneficial. They can guide you through policy details and help ensure you select the right one for your circumstances. 

The importance of being prepared

Income protection insurance offers peace of mind by safeguarding your financial stability during challenging times. Whether you’re employed or self-employed, considering this safety net can help maintain your standard of living when unforeseen events occur. Remember, taking a proactive approach today can safeguard your future well-being.