Income Protection pays out a tax-free monthly income until you’re able to return to work or the policy ends. Cover can be taken right up to age of retirement date if needed.
Income Protection Insurance is ideal for families with only one source of income, homeowners with monthly mortgage payments or self-employed people whose income depends on their ability to work. It’s also ideal for families with regular bills, parents at home who would need to pay for child care and even employees who get limited or no sick pay from their employer.
It’s a good idea to tie in the commencement of income protection payments with the length of time you receive sick pay from your employer or how quickly your income would stop if you are self-employed.
The most important factor when arranging Income Protection is to ensure that the definition of disability is stated as unable to carry out your own occupation. This basically means that the policy will pay out if your income has stopped and your doctor confirms that you are unable to carry out your own occupation due to any illness or disability.
Any other definitions which typically include “any occupation”, “suited occupation” or “activities of daily living” should be avoided if at all possible as the likelihood of a successful claim is greatly diminished.
The availability of “own occupation” cover varies from insurer to insurer and is primarily based on your particular occupation. It is important that cost is not the only factor that you consider when arranging these types of policies. There is little point in paying for a policy if it is unlikely to pay-out when you need it.
We can advise you which insurers can offer you the most comprehensive cover with the lowest costs.
Whilst these plans are very different from PPI we are obliged to make the following statement:
“Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income”