Income Protection Insurance
If you and your family rely on your earnings, income protection insurance could be crucial, as it covers you with tax-free monthly payments if you became unable to work.
If you and your family rely on your earnings, income protection insurance could be crucial, as it covers you with tax-free monthly payments if you became unable to work.
Income protection insurance covers you with tax-free monthly payments if you became unable to work. This could be either as a result of injury or illness. Income protection insurance differs to critical illness insurance (which would cover a serious illness causing long-term absence or the ceasing of work altogether).
Income protection insurance is intended for situations where an illness or an injury inhibits an individual from working, whether that is in an employed job role or self employed, and therefore having no earnings coming in. If you have other savings, or could borrow money from friends or family, then you may not need this type of insurance. However, most individuals would need a source of income whilst they were unable to work whether it was on a short or long-term basis.
There are various types of insurance policies that offer income protection plans, and they vary based on the likely length of the individual’s absence from work. The two main types of income protection are short-term and long-term policies. Short-term policies would be for a set period of time and would assume your absence from work is only temporary. Short term income protection policies can be claimed against more than once. Logically, the longer-term policies would protect your income less definitively and could continue until retirement.
The cost of protecting your income will vary depending on the type of policy that you select, the percentage of your gross income you agree to cover, and your personal circumstances. As with any health-related insurance policy, your income protection insurance premium will be dependent on your age, weight, general health, lifestyle choices (smoking/drinking etc) and the nature of your work. For example, tradespeople’s jobs can often be considered more dangerous, so this can be reflected in the premium for your income protection plan.
Finding an income protection plan can be tricky to navigate in trying to figure out how much cover you need as well as which type of cover you will need. Active Mortgages has a team of income protection insurance specialists who work daily with a range of clients who want to protect their incomes if they became unable to work. By using one of Active Mortgages’ experienced income protection insurance advisers, you can feel confident that you are getting the right advice.
Active Mortgages will take time to listen to your personal circumstances and how much you can afford to pay as well as the length of income protection plan that is required.
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