Income Protection Insurance

What is Income Protection?

Income Protection Insurance does exactly what it says on the tin. It is an insurance policy designed to replace your income should you suffer from a long term sickness or illness that stops you from receiving your income because you are unable to work.

The income insurance will pay you a set monthly fee for as long as you are unable to work even if this means paying you until your retirement age.

How much can my income protection insurance pay me?

Your income protection is designed to replace your income and because of this, each policy is tailor made to suit your needs. You can have your policy pay up to a maximum of 65% of your gross income (before tax) and any payment you receive as part of a claim is not subject to tax! So whilst 65% of your income may sound low, when you consider the amount of tax you pay on your income, the two figures work out roughly the same.

Won't inflation mean my income insurance could be worth less in the future?

You income insurance comes with the option to 'index link' your policy which effectively means it can offset the effects of inflation by adjusting itself with the retail price index.

Normally the value of a pound changes over a number of years meaning that what a pound will buy you today, will probably not be the same in say 10 years time.

A good example of this is a loaf of bread.

In 1970, an average loaf of bread could be bought for just 9p. This rose to 50p by 1990 and last year topped over the £1 mark. (Source: Office of National Statistics) Whilst this price hike is not completely because of the effects of inflation (its to do with the increase in energy and production costs) quite a large part of it is because of inflation changing the value of a pound.

Now, you might be wondering how this effects your income protection insurance? What it means is that your cover which pays a monthly benefit will alter that monthly benefit each year so that in 10 years time your benefit will still be able to buy you roughly the same number of loafs of bread.

What happens if I change my job or income?

Your benefits and premium are based on your job and income at the time when you take out your income insurance cover.

You do not usually need to inform your insurance company about changes in your occupation however you may want to review your benefit level if your new job or position comes with an increased income.

Will my income protection insurance cover me abroad?

The way your cover works whilst you are abroad changes from company to company but generally speaking if you are in Europe most income protection policies will continue to provide some form of payout. Because this changes from company to company, please check with your advisor or in the companies key features document.

Are there any illnesses that my cover won't protect me from?

Generally speaking, your cover is only not effective against HIV/AIDS (unless you are working in the emergency services and contract the disease through your work) and against conditions which your insurance company exclude because you have suffered from them in the past.

Your insurance company will tell you about any excluded conditions, before your cover starts so that you are completely aware of what you can and cannot claim for.

Will this cover payout if I'm affected by unemployment?

Income Protection Insurance will not cover you from unemployment or redundancy. It will only cover you from sickness and illness. You can protect yourself against unemployment with an Unemployment Insurance policy. Please see our Mortgage Unemployment Insurance Guide for more information.

Which insurance companies offer income protection?

A wide variety of insurance companies offer income insurance. Some of these are specialists in income cover and others also offer policies such as life insurance and critical illness cover.

Our quick and easy quotations are gathered from the whole of the market to ensure we can deliver one of the most competitive premiums out there. You can quickly compare each income protection plan and speak to a qualified insurance advisor if you need any guidance.

Some of the companies who offer income protection include:

Will the insurance company require a medical or to speak with my doctor?

Sometimes insurance companies will ask to speak to your GP or ask for a nurse to conduct a short medical examination. These are paid for by the insurance company and are arranged on a date and time to suit you.

The extra information gathered allows the insurance company to get a full picture of your health and reduces the risk of non-disclosure and problems with payouts when you need to make a claim.

How do I arrange Income Protection Insurance?

Organising your income protection insurance is quick and easy and we'll do most of the work for you.

Simply click the button to get your free, instant quotation and then opt to either apply immediately online or speak to an advisor who will be able to answer any questions you have and guide your through the application process.

We'll complete all the paperwork required and then simply request that you check over the information and complete with a signature.

We then arrange your cover with the insurance company and let you know when you cover is ready for you to commence.

All in all, its a quick, easy and painless process with as little work for you as is possible!