The Importance of income protection insurance
If you’re somebody who worries about not being able to work due to disability, sickness or mental illness, then income protection insurance is something you may wish to consider taking out. Like many people, those worries revolve around how you are going to pay the mortgage and household bills – even putting food on the table. Income protection has gained a poor reputation in recent times, however it was created to protect people and it can be a vital lifeline for people who find themselves in a difficult position due to illness or disability.
Income protection, sometimes called permanent health insurance, can provide you with an income of between a half and two-thirds of your normal pre-tax earnings until you retire or return to paid work. It is usual in these circumstances for policy holders to have to wait four weeks for payments to commence, though if you receive sick pay from an employer then payments will not commence until after those employer payments have ceased.
This type of policy is ideal for people who are self-employed or don’t receive income protection through work, or people who don’t have insurance policies that cover illness, mortgage protection policies or significant savings. However, even if you have significant savings, you may still wish to consider income protection insurance to avoid putting any unnecessary strain on your nest egg.
Exclusions you should be aware of include: not covering every type of illness, pre-existing medical conditions, and that some family medical histories may invoke certain attached conditions. However, all these can be explained in full by an insurance adviser.
You should also inform your adviser/insurer about dangerous hobbies or a lifestyle that includes smoking, heavy drinking or drug taking, as well as any change of job that may be a higher risk than any previous employment. Failure to disclose details that may change the risk assessment of your policy may render it void.
The cost of your policy will be worked out according to current take home pay, minus any amount you would receive in state benefits, minus any work related expenses such as food, clothing and travel, and plus any expenses such as increased heating bills or medical equipment.
If, like lots of people, income protection is an insurance you think you need, then have a chat with one of the friendly advisers at Endsleigh Insurance.
