Safeguard your financial stability with income protection insurance.
This vital cover ensures you receive a tax-free monthly income in case illness or injury hinders your ability to work.
Protect your lifestyle and financial commitments, and focus on your recovery with peace of mind.
Imagine falling ill or getting injured, and being unable to work for an extended period. How would you manage your bills, mortgage, or daily expenses? Do you have sufficient savings or support to navigate the loss of income?
That’s where income protection insurance can be invaluable. It is a type of insurance that provides a regular income if you are unable to work due to illness or injury. This cover assists you in meeting essential living expenses, including mortgage or rent, bills, and food. It ensures a percentage of your monthly salary is paid for a set amount of time until you can return to work or retire, providing a necessary monthly payment to help you focus on recovering.
Income protection insurance differs from critical illness insurance, which pays a lump sum upon the diagnosis of specific serious illnesses, or life insurance, which pays a lump sum in the event of death.
In situations where illness or injury prevents you from working, your income might not be sufficient to support yourself and your family. While your employer may provide some sick pay, it might not last or cover all your expenses. State benefits could be available, but they might not be guaranteed or enough.
Income protection insurance offers a reliable, tax-free income, replacing up to 70% of your earnings with a monthly payout. This assurance provides peace of mind, allowing you to maintain your lifestyle and meet financial obligations without relying on savings or loans.
Moreover, income protection insurance enables you to concentrate on your recovery and health without the added worry about finances. Depending on the policy and insurer, additional services such as rehabilitation, counselling, legal advice and more may also be available.
Upon securing an income protection policy, your journey begins with providing personal and financial information. Details such as your age, health, occupation, income, and expenses are crucial in shaping the contours of your cover.
Following the initial steps, it's time to make critical decisions. You'll need to determine the cover amount, the duration of the cover, and the time between stopping work and the commencement of payments.
The chosen coverage amount plays a pivotal role in shaping the income you will receive. Typically ranging from 50% to 70% of your pre-tax income, this decision, along with the coverage duration, significantly impacts policy costs.
Decide between short-term policies, providing fixed payouts for one or two years, or long-term policies, extending until your return to work, retirement, or demise. This decision is particularly vital for physically demanding jobs, offering financial support in case of accidents or injuries hindering job performance.
The deferral period, the duration between stopping work and payment commencement, is a crucial aspect to tailor. It can be adjusted from one month to a year or more. The longer the deferral period, the more cost-effective the policy. Consider your financial situation and the duration of sick pay or savings when making this decision.
To keep the policy active, you'll need to pay a monthly or annual premium. The premium depends on factors such as cover level, duration, deferral period, type of policy, and personal and financial factors. Explore whether the premium is fixed or variable, with the former remaining constant throughout the policy and the latter subject to changes based on inflation, interest rates, or your circumstances.
In the unfortunate event of illness or injury preventing work, you must initiate a claim with the insurer. This involves providing evidence such as a doctor's note or medical report and proof of income through payslips or tax returns.
The insurer will assess your claim, evaluating the provided evidence. If approved, the agreed income is disbursed after the deferral period.
The payments will continue until you return to work, retire, or die, or until the end of the policy term, whichever comes first. This continuity is especially crucial if alternative income sources, such as statutory sick pay, are unavailable from your employer.
Safeguarding your income and lifestyle during incapacity due to illness or injury.
Providing a regular, tax-free income to cover essential living expenses.
Granting peace of mind and financial security, reducing reliance on savings or loans.
Enabling focus on recovery and health without financial concerns.
Offering flexibility and choice, with policies tailored to your needs and budget.
Supporting additional services like rehabilitation, counselling, or legal advice, contingent on the policy and insurer.
As experienced mortgage advisers and insurance brokers, we assist in finding the most suitable income protection policy.
We compare quotes from various insurers, clearly explain policy features and benefits, and guide you through the application and claim processes.
With over 28 years of experience in providing personalised mortgage and protection advice, we collaborate with leading UK providers, accessing various deals and discounts.
We’re ready to answer your questions and provide a free, no-obligation quote.
Protect your financial future with income protection insurance.
Our friendly and experienced advisors will be happy to help you find the most suitable income protection policy for your needs.
Income protection insurance covers any illness or injury preventing work, provided it's not excluded by the policy. Examples include back pain, stress, depression, cancer, heart attack, stroke, and accidents.
However, certain conditions like pre-existing medical conditions, mental health disorders, alcohol or drug abuse, self-inflicted injuries, or criminal acts may be excluded.
Review policy terms and conditions before purchasing to ensure you will still be covered if you can do other types of work than your own job.
The required cover depends on personal and financial circumstances, including dependents. Consider covering essential living expenses and commitments in light of rising living costs.
Evaluate potential income from other sources, such as employer benefits, state support, or partner contributions. Aim for an adequate level of cover, not exceeding 70% of pre-tax income, as most insurers cap payouts at this level.
Duration varies based on the chosen policy type and term. Select between short-term policies, paying out for one or two years, or long-term policies, extending until return to work, retirement, or death.
Opt for a policy term aligning with needs, budget, including the deferral period, and not surpassing the expected retirement age.
Make sure to check your policy’s terms and conditions for any specific guidelines on canceling the policy.
The time between stopping work and payment commencement is known as the deferred period, or waiting period, ranging from one month to a year or more.
Longer deferred periods can reduce policy costs. It is important to consider the duration you can afford to wait before receiving income, taking into account factors such as sick pay or savings.
After the deferred period, payments start on the first day and continue until return to work, retirement, death, or policy term conclusion.
Cost varies based on factors such as cover level, duration, deferral period, age, health, occupation, lifestyle, and income. Older age, poorer health, riskier occupations, unhealthy lifestyles, and higher incomes generally lead to higher costs.
Consider Newhomes for expert guidance and tailored solutions to help you make the right choice for your income protection insurance.
Yes, self-employed individuals can get income protection insurance.
This type of insurance is designed to provide a regular income if you are unable to work due to illness or injury.
It's particularly important for those who are self-employed since they don't have access to the same benefits as employees, such as sick pay or salary continuation.
