What Is Income Protection Insurance?
Below, we will discuss everything you need to know about income protection insurance. Read on to learn more.
What is income protection insurance- how does it work?
Income protection insurance supports you financially in the case that you are unable to work due to injury or illness. Income protection insurance will either cover you in the long term or the short term.
A couple of important things to note about income protection insurance is:
- If you cannot work due to injury or illness it will cover part of your income
- Income protection will cover you until retirement, death or your policy ends
- You can claim as many times as needed
What is income protection insurance- How much will it cost for me to get income protection insurance support?
Certain factors determine how much it will cost for you to get income protection insurance support. These factors include:
- Age
- Health
- Job
- How much of your income is covered
- When you want your policy to finish
Unless stated or requested otherwise, payments will start when sick pay ends or any other insurance stops covering you.
What is income protection insurance- How much will income protection insurance cover me?
Income protection insurance will cover between 50% to 70% of your income and all payments are free of income tax.
What is income protection insurance- When is income protection insurance right for me?
You may want to consider income protection insurance if:
- You can’t afford to pay the bills if you got ill or injured
- You have no sick pay to fall back on. Ask yourself: When does this sick pay run out?
- You’re self-employed – what would you do if you couldn’t work or got injured?
What is income protection insurance- You may not need income protection if…
- Your sick pay can cover you- on rare occasions, employers will cover their employees for over a year
- If government benefits are enough
- If your savings can support you
- If your family or partner can cover you
- If you can retire early
What is income protection insurance- What is the difference between income protection and critical illness insurance?
Income protection insurance– Pays a percentage of your gross salary as a regular payment until you are able to return to work.
Critical illness insurance– provides a lump-sum payment if you’re diagnosed with a critical illness that’s covered in your policy.
What is income protection insurance- Is income protection the same as payment protection insurance (PPI)?
No, these are two completely different support options.
Income protection– Pays you a percentage of your salary if you’re unable to work due to illness or injury.
Payment protection insurance– covers the repayments on a specific debt, such as a mortgage, loan or credit card.
What is income protection insurance- Will income protection affect any government benefit I receive?
Yes, your income protection may affect any government benefits you may receive. This can change at any time.
Need more information?
Thank you for reading our blog on ‘what is income protection insurance?’. If you haven’t found the information you’re looking for and need more income protection advice or other financial advice, maybe it’s time to get in touch with us at Weystone Financial.