Everything you need to know about income protection insurance

A study by the ABI (Association of British Insurers) has found one million people in the UK are unable to work due to serious injury or illness every year.

It's all too easy to ignore this study and assume it will never become your reality. However, take a moment to think. If you found yourself unable to work, would you be able to get by on savings or sick pay? If your answer is no, you must find a way to protect your income.

What is income protection insurance?

Income protection insurance is designed to provide cover for those who lose employment or are unable to work due to illness or injury. A long-term policy, it offers regular, monthly set payments to replace part of your income until you retire or return to work.

There is usually a waiting period before your set payments start, often scheduled to begin once your sick pay ends. The longer you defer your payments, the lower the cost of the monthly premiums.

Many people don't realise income protection insurance also covers self-employment. Furthermore, it usually offers additional benefits, such as hospitalisation cover, rehabilitation cover and proportionate cover. In some cases, your premiums can be reduced each year without affecting your coverage if you enrol on a healthy living program. Please speak to our advisers to discuss the available options.

Do I need income protection?

As the figures from the ABI prove, millions of workers are affected by unemployment due to illness or injury. Regardless if you live alone or are the main breadwinner for your family, if a sudden illness means you cannot pay the bills, you should consider income protection insurance.

However, we suggest checking with your employer about what they provide for you if you’re off sick. You may not need income protection if you can get by on sick pay or an employee benefits package.

Moreover, if you could survive on government benefits or have financial support from your partner or family, income protection may not be for you. Are you near retirement age? Consider early retirement as you may even be entitled to an early pension.

Vincent Burch has a full range of income protection policies available.

For more information, please call us on 01603 340 644. Our dedicated team will be more than happy to answer any questions you may have. Our advisers will also discuss the different types of cover available and what policies will be best for you.