Do I need it?

No one wants to think about being sick or suffering a serious injury. But it’s well-worth being cautious and making sure you’re well covered should the day come. Income Protection Insurance provides you with the security of knowing you’ll be taken care of during tough times.It’s highly recommended as an additional safety blanket, should any injury or sickness crop up later in life.

What are the benefits of this policy?

  • You’re covered- the main benefit is that you’re covered no matter what.
  • Loan/bill protection- should you be unable to work, this policy covers any loan or bill repayments
  • Mortgage protection- this policy covers mortgage repayment

With sickness or injury, income protection could offer you up to 70% of your monthly income. With unemployment protection, you could be offered up to 65% of your monthly income.

What is the difference between income protection and life insurance?

The difference between this insurance and others is how it long-term benefits. It is a back-up for your income. It’s also a product of your own income, put away over a longer term. It’s different from life insurance, which covers your dependents in regular payments, or a lump sum should you pass away. With life insurance, there’s a heavy focus on those around you after your death- with this policy, you can rest assured that you will be covered should anything happen that prevents you from work.

How does it all work?

The three main reasons for needing to access this policy are:

  1. Accident: protection from accidents which leave you unable to work
  2. Illness: cover against sickness
  3. Losing your job: cover against unemployment

Income protection covers any period of sickness/injury and you can claim it for as many times as you need, while the policy lasts. The amount of cover you take out is all based on your income. Usually your cover is 50-70% of your income. It’s a long-term insurance policy which pays out until you retire or are ready to get back to work. Now, there’s usually a waiting period before payments can start. In most cases, your payment will start after your sick pay ends (or after any other insurance has stopped covering you). Remember, it’s a long-term insurance intended to replace your income!
It should be noted that this is different than critical illness insurance, when a one-off lump sum is paid should you fall seriously ill. Income protection is designed to cover your regular income. Critical illness insurance only lasts 2-5 years and is designed to cover certain and fewer illnesses and injuries.

Any cases where income protection insurance isn’t needed?

Situations where you wouldn’t need income protection insurance are subjective to you. If you have enough savings to get you by during any potential long-term rainy periods, then you can skip on income protection. Similarly, if you know you can survive on government benefits or are already on benefits which are substantial enough for your circumstance, then you are good to go. If you have a partner or family members that you can rely on, or if you are nearly at retiring age, income protection might not be necessary.

How much would it cost?

This really depends on the policy and your circumstances.

This insurance is designed to pay out for the long-term and covers a range of illnesses. Usually, however, the cost of the policy is based on:

  • Your job
  • Your age
  • The range of illnesses covered by the policy
  • Your health/weight/whether you smoke or not
  • The percentage of your income you’d like to cover (usually this is between 50-70%)

How to find the best provider?

Finding the right insurance for you might be a little challenging; we know there is quite a range of companies to choose from.
At Yes Mortgage Services Ltd., we offer you the best rates possible during your time of need. Book a call with Kelly, our specialist advisor, today for a free quote. We can help you decide whether income protection is the best plan for you.

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We need to be honest with you… Your home may be repossessed if you do not keep up repayments on your mortgage.