What is Income Protection?
Discover insurance that looks after your money – because your routine income shouldn’t be hurt by common injury or illness, LifeMarket offers the UK great deals for Income Protection. This insurance is a life policy that protects the loss of your regular income as a result of unemployment, illness or accident. The pay-out offers a tax-free income that covers you until you either return to work or retire.
Secure your monthly income if you can no longer work.
Income protection solves a simple frustration: what if sickness, injury or employment caused strain on your finances? This insurance is a form of financial relief insofar as clearing away some of the worry so that you can focus on what matter most, recovering your health.
Once referred to as permanent health insurance, income protection addresses the common stress that your routine income could be at risk from casual injury or sickness.
Is income protection insurance right for me?
- Keep your health & lifestyle unchanging.
- Secure a monthly income no matter what.
- Peace of mind against the risks of accident or illness.
How does income protection work?
Insurances can offer protection against a universe of reasons, helping curb all sorts of doubt. Income protection, unlike other types, is uniquely suited to safeguard your monthly income.
Through affordable monthly premiums, you can secure an income protection plan that looks after your money. In the result of sickness or injury-related time off from work, your bills will still be managed by a pay-out that acts like a substitute income for your money. It can be used to cover the everyday costs of living, or the more taxing bills the likes of mortgage premiums or rent.
Why do people get income protection?
- An insurance type designed to help maintain your standards of living.
- Secure a monthly income to help pay the bills.
- Lose the stress of money troubles.
What types of policies are available?
There are two different ways to secure an income protection plan: longer- and short-term insurance. The decision – which one is right for me? – a matter of equal parts budget and goals. Only you can decide on a life policy that truly sizes up to your lifestyle.
- Long term
Longer lasting cover until you’re able to return to work or reach retirement. Your pay-out, a proxy income, is tax-free.
- Short term
Rather than a policy with longevity, your insurance will pay-out for about 12-months after a claim. This can result in a cheaper policy than a longer-term counterpart.
Income protection insurance, explained
No two polices are exactly the same.
It’s important that you tailor your policy to match your expectations from your insurance. Income protection should hold a sum assured, or cash value, that closely aligns with how much you’d need to secure your daily life, so that you don’t feel disrupted. In other words, it’s a substitute income for the one you already have.
If you require, for example, a policy with longer terms, or periods of cover, than you’ll need to specify this in your application. If you’re looking to secure a cheaper policy, because insurances work to all types of budgets, then adjusting the term lengths can help accomplish this.
- Income replacement.
Firm up a contingency plan that secures the kinds of funding you need on the day-to-day.
- Return to work after recovering.
One of its praised benefits is how it frees up the financial pressures of being away from work, so you can refocus on your wellbeing. Return to work satisfied that bills have been honoured and you’re set to re-enter the workforce.
- Illnesses that are covered are usually vast.
Most policies will cover a large net of illnesses.
- Waiting periods may apply.
There may be a buffer, or waiting period, before your payments kick-in. That could be because you’re covered by other insurances, or your work covers a sick-pay window. This factor can influence your premiums. Generally, the longer the wait, the lower the policy costs.
Why is it so popular?
We all share the same urge to protect our money against the harder moments in life. And, it’s a statistical likelihood that injury, accident or illness is more probable to disrupt your life than anything else. In fact, a predicted share of 141.4 million working days were lost in 2018 alone to sickness.
So, why let accident or injury casually hurt more than just your day?
How much income protection do I need?
Your level of cover will answer to both your goals and your budget.
What if I’m on a budget?
It’s commonplace to see people shop around the marketplace to secure rates at lower prices, mostly to match up to their budgetary needs. Life cover, unlike its myths, is affordable. That means you pair a policy with just about any budget.
What kinds of goals should I plan around?
A goal can take the shape of many things. Perhaps, if setting up goals is feeling tricky, you should consider if your target is smart, achievable, reasonable, sensitive to your budget, and, importantly, personal.
Popularly, goals match up to people’s financial targets. A common motivation behind insurance, for example, is to secure a sizable loan, such as a mortgage. Or, sometimes, it’s as simple as keeping your routine life undisturbed by financial worry.
Your level of cover may be guided by a handful of other financial tells:
- Do you have any debts or loans?
- Do you have a mortgage or pay rent?
- The value of normal income.
- The actual costs of daily living.
How much does income protection cost?
The cost of an income protection plan will vary depending on a few influences that shape the weight of your premiums – namely your health, smoking status, and desired level of cover. The other deciding factor could be your job.
There’s a laundry list of criteria that impact your premiums, such as:
- lifestyle (and level of risks).
- marital status.
- smoking status.
It’s something of a best practice to consider the potential risk of being uninsured. Such as, can you afford to maintain your current living standards without an active income? Do you have weighty enough savings to substitute your income?
How can I get cheaper income protection insurance?
Insurance can work to most budgets.
If you’re keen-eyed and hopeful to score a policy that flatters your current money, then it’s oftentimes best to look around at the whole market int the UK. You can achieve this by using comparison tools the likes of LifeMarket and spot deals quickly and conveniently.
It’s important to remember that not every insurer will quote the same value, nor does one failed application negate the next one. That means that shopping around using a comparison tool can actually save you time and money.
What does income protection actually cover?
Depending on your nominate length, and level of cover, every income protection policy will secure you a proxy, or substitute income, when you claim. This is called the pay-out and is a tax-free sum of cash that you can claim on when you are affected by one of the follow:
- accident or injury.
- a sickness defined in your policy.
Ultimately, insurers will look at your inability to work before deciding on the validity of a claim.
What does it not cover?
Because this policy replaces your part of your income when you’re inactive from the workforce, it’s limited to claims for certain sickness’ and injuries. It’s always advisable to check your policy specifics to understand the exact details of your cover. Yet, the likes of redundancies and other inactivates from work my be voided in your policy.
Are there any exclusions?
Any “exclusion” in a life policy will describe something that is not covered, or included, with your insurance.
Every policy looks different on paper and that’s because your insurance should be a personal document. You can, however, expect to see a different dread list of illnesses, or sickness, that can vary between policies. If you, or a family member, has a pre-exsiting condition that may be forfeited in your policy, known as pre-existing medical condition.
Why do I need income protection?
The statutory sick pay (shorthanded as SSP), though helpful, doesn’t often offer up enough financial relief to stay off the hurt from losing an income from accident or illness. Not only can resources feel tight, but it’s not always an obligation for employers to cover you for lengthy periods of time.
Risking the possibility of financial upset, experts often point to income protection as a sensible back-up plan that most working adults in the UK should at least consider.
Is it really worth buying a policy?
Most look to income protection as a way of shoring up a contingency plan. This type of planning, a way to future-proof your finance, is helpful in making your money more than any given moment, by looking ahead. Plan for today, tomorrow, and the any other day.
If you’re comfortable with your savings and your money is firmed up for life’s more difficult moments, then you may not need income protection. Yet, for that added financial certainty, a policy could be fit for you.
Where can I buy income protection cover?
The kinds of deals you might qualify for will change between insurers. So, affordability doesn’t have to feel exclusive. Rather, it’s about eyeing the whole UK market for its riper opportunities.
Compare income protection cover (for deals)
There’s a convenient way of spotting deals that can make your policy feel right.
We make our services entirely free and convenient whenever there’s an inquiry about life protection. See our income protection rates with a quote.