If you are unable to work due to injury or illness, Income protection insurance is useful cover to protect you from the loss of income that may be experienced as a result of these unforeseen circumstances. Following a successful claim, the policy will pay you a tax free monthly payment until you have recovered and able to return back to your work, or until you retire, or until the policy reaches it end date. Another name for income payment insurance is Permanent Health Insurance
How much can I expect to receive if I claim ?
You can usually expect to receive between 50% to 70% per month of your usual monthly salary before tax. The reduction is designed so that the shortfall can be topped up by claiming certain benefits applicable to your circumstances, and that the fact that the payments are received tax free. The reduction also acts as an incentive to return back to work.
- Not all types of illnesses are covered (check with your broker or provider for cover details)
- Pre-existing medical conditions applying to you and even your family members may not be covered
- You may not be able to claim if you stop doing your current job and you are not willing to carry out other types of jobs different from your usual employment
Waiting periods following a claim
Usually the minimum waiting period before payments commence on a claim start from 4 weeks. You can apply longer waiting periods to your policy and this will have the effect of lowering your premiums each month. The waiting period, which is also known as the ‘deferred period’ is set to coincide with period when your sick pay benefits from your employer come to an end. So, if you’re employer pays sick pay for 12 weeks, then you should set a deferred period of 12 weeks to seamlessly carry on receiving an income.
How much does it cost?
The following factors will be taken into consideration by the insurer when deciding a monthly premium:
- Your age (will be cheaper the younger you are)
- Your gender (you will pay more if you are male, as men make more caims than women)
- Health Status (level of your current health and your weight)
- Occupation (some occupations are considered higher risk than others, higher risk occupations add a premium on to your policy price)
- Your family medical history
- Lifestyle and hobbies (if you’re consumption of alcohol and tobacco is heavy, or your pastimes and hobbies are of a dangerous nature, then this will drive up your premium)
- The waiting/deferred period (you’re premium will be cheaper if your waiting time is longer)
- Whether you are willing to consider alternative wok from your usual employment when falling ill or becoming injured, Will be cheaper if you are wiling
What are the alternatives to Income protection insurance ?
As an alternative to Income protection insurance, you could consider critical illness insurance. Critical illness insurance pays out a one off tax-free lump sum on diagnosis of a specific serious medical condition. Out of the two types of policies, critical illness cover would be the cheaper option, but Income protection insurance however, covers a wider scope of illnesses and conditions, and may also provide cover for a longer period of time if you are unable to work.
For more information on Critical illness insurance – CLICK HERE
How I can Help
I can provide you with concise and comprehensive advice and assistance regarding all aspects of your Income protection insurance needs, from initial advice to application stage, and all the way to completion. Having an insurance professional on hand to assist you every step of the process can save you time, effort and money, easing the stress of arranging insurance.
Please contact me today for an informal and friendly chat to discuss your needs. All initial advice is completely free and confidential. You can contact me using the “contact us” form at the top right of this Page and i’ll get back to you as soon as possible, or alternatively you can contact me via my details below, or CLICK HERE
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