An Income Protection policy, also known as IP insurance or Permanent Health Insurance, will provide an income for your household whilst you are in recovery from almost any injury, illness or accident that results in you being unable to work. According to the Association of British Insurers (ABI), every year, approximately one million people in the UK are left unable to work following an injury or serious illness. Income Protection Insurance is an ideal back-up plan if you find yourself unable to work due to an to injury, illness or accident by ensuring you can keep paying the bills and look after your loved ones.
You can claim countless times whilst the policy is in place, but there is no cash-in value at any point. There is often a waiting period before the payments begin, and you usually set monthly payments to start either after your sick pay ends or you get another job. The longer you leave it, the lower the monthly premiums. With this policy, you decide the amount of cover and how long the protection should last for, ranging from months to years. The longer the chosen period, the lower your premium. There are two types of Income Protection Insurance: long-term and short-term.
This option is designed to ensure you receive a regular income if you fall ill or develop a disability. It pays a percentage of your gross wage through regular payments until you return to work, retire, pass away or your policy comes to an end. It will, in theory, replace your income whilst you are unable to work. To qualify, your GP must have deemed you unfit to work.
This insurance will usually only pay out for one or two years. Many policies do not need to cover a certain debt; they can instead be used to pay for your daily costs if you lose your income. Examples include Mortgage Payment Protection Insurance.
If you need some guidance on which type of cover is best for you, get in touch with our friendly advisors on 0161 241 6146.
Please note that the descriptions above do not constitute as financial advice and may change dependent on individual circumstances and budgetary requirements. For a quick and easy comparison, get in touch on 0161 241 6146 and one of our friendly advisors will be able to help.
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