Income Protection Insurance
This type of insurance fulfils a different role to Critical Illness cover, in that it is designed to provide a replacement income if you cannot work through ill health. It is a permanent style of insurance that can be claimed on many times over the years, whenever you are diagnosed as medically unfit to work.
Most policies can provide 50% to 65% of your normal working income, that will be paid as long as you are unable to work, or until you have returned to work, died, or the policy has come to an end.
Typically cover can be used to help pay monthly mortgage or other costs until you can return to work, so it might be set up in support of a mortgage, or it might be set up to provide an income to retirement.
Cover can be level or increasing, and benefits can be paid immediately, or after a deferred period. The longer the deferred period the cheaper it is because it means you would be using your own savings to keep you going for a period of time, before the insurer has to start paying benefits.
Cover can be arranged right through to age 65, or shorter term policies can be considered that provide replacement income for perhaps 2 or 5 years. As these are shorter term policies, they cost less.
The main differences between Income Protection plans, and Critical Illness Cover, is that an income protection plan is designed to pay out on any medical condition that stops you from working, whereas, critical illness plans pay out on diagnosis of certain illnesses.
Income protection plans
These provide an income rather than a lump sum, and they can be claimed on time and again, whereas critical illness plans usually pay a lump sum, and can only be claimed on once.
There is room for both types of cover, as both a lump sum, and an income may be needed in times of serious ill health. It is also possible to combine short term unemployment cover, or short term accident and sickness cover with critical illness cover and income protection, to provide a comprehensive suite of protection should the worst happen.
There is no doubt that in a time of financial crisis, an insurance company is much better placed to withstand the strain than most private households.
Price is obviously a consideration, but we would urge you to speak to us first before deciding how best to protect your own and your family’s financial future.
With professional advice, quality and value for money can be obtained in a package tailor made for your requirements. Insurance is too big and complex an area to just go for the cheapest and hope for the best.
For insurance protection we offer products from a wide range of providers
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