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Income Protection Insurance

Life Insurance or Income Protection Insurance?

Income protection insurance is designed to offer security for the policy holder to keep paying necessary bills if they become unable to work due to injury or illness in the form of a monthly benefit amount. When considering if you might need income protection insurance, look at your regular monthly bills like: Household expenses, Credit card loans and School fees. If you add all of these up, could you or help from family or friends continue to afford these if you weren’t able to work?

Mental Health and Income Protection Insurance

Between 2017 and 2018, the HSE or Health and Safety Executive found that 15.4 million working days had been lost because of work-related stress, depression or anxiety. Further to this, in 2011, 31% of all claims with the insurer LV were for Mental Disorders like stress. Legal & General reported that mental health problems were the second most common cause of income protection claims in 2015, making up 22% of its claims with the insurer Aegon saying it accounted for 29% of claims in the same period.

Understanding Income Protection Insurance

When trying to take out Income Protection Insurance yourself, there is often a lot of confusion about policy options would be best and the costs of the premiums and cover. This article serves to clear up some of the confusion and help you understand the types of policies you can take out.

On average in the UK, the weekly household spend according to research done by the ONS is £554.20. This is spread across a wide variety of areas and you can look further in depth in the table below.

Directors Income Protection Insurance

All Income Protection insurance policies exist to give you a degree of cover if you can’t work, due to either serious illness or injury. But what if you are the Director of a company? What would happen to yours and the company’s earnings?

Self Employed Income Protection Insurance

Self-employed income protection insurance is an insurance policy that pays out a tax-free proportion of your pay if you have an injury or become ill to the point where you cannot return to work. Due to the nature of self-employment, you don’t get statutory sick pay or redundancy pay, so an income protection insurance plan could pay out in the event of illness or injury. These policies usually pay out a set monthly amount for an agreed period of time (commonly 12 or 24 months), or until you are able to return to work.

Critical Illness Vs Income Protection

In the UK alone, over 1 in 3 people will develop a critical illness, for instance a form of cancer, in their lifetime. Regular income is necessary, as mortgage’s and other payments mean your family or home is at risk if you have to be off work due to a critical illness and recovery period. Critical Illness Cover and Income Protection may differ, but both can support you through a financially tricky time.

Below, we have outlined the main differences between Critical Illness Cover and Income Protection.

 

Do I Need Income Protection Insurance?

Income Protection insurance exists to give you a degree of cover if you can’t work, due to either serious illness or injury. Would your savings or sick pay from work support you enough to pay the bills?

If you didn’t have income protection insurance, you would have to survive on whatever savings you had or the sick pay you receive from work. This would have to last you until you were able to return to work or even longer. Around one million workers a year (according to the ABI) become unable to work due to serious injury or illness.

Chat with an expert now!

Be put in contact with one of the UK’s best income protection advisers

Speak to one of our friendly income protection experts now to find out more independent,
unbiased Income Protection information.

click here to chat with an income protection expert now

Or call us on 01604 805862

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