Although many people have not heard of it, Income Protection Insurance is a great tool for helping to cover your financial outgoings if you were unable to work due to illness or injury. It's designed to pay a tax-free monthly percentage of your gross salary directly to you to help support you through periods of loss of income.
Every year, one million UK residents are unable to work because of illness or injury. For the lucky ones who have great sick pay cover from their workplaces, there is little to worry about. However, for those without sick pay, strict limitations to sick pay or even the self-employed, there is a real concern for their financial security.
For the majority, living off £109.04 a week in Statutory Sick Pay is not enough to cover household bills. If this is the case, consider taking out an Income Protection Insurance policy.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTAGE.
The mortgage will be secured by a charge on the property of the customer.
What is Income Protection Insurance and Why Do I Need It?
Who Would Need Income Protection Insurance?
1
Self-Employed
What Income Would You Rely On?
2
Employed
Are There Limitations to Your Sick Pay Cover?
3
No Sick Pay
Your Employer Does Not Provide Sick Pay
4
Breadwinners
How Would You Provide for Your Family?
5
Homemakers
How Would Your Household Function?
Anybody Who Hasn't Got the Security of Workplace Sick Pay Should Consider an Income Protection Policy, Living Off £109.04 a Week Could be the Reality For Many Without Financial Protection in Place
With one million Brits unable to work each year, that's one million families losing one of the main streams of income into their homes and in some cases, the only stream of income. Without sick pay from their employer, those unable to work would be looking at an income of £5,688.80 a year. However, by taking out an Income Protection Policy, we can make sure that around 60% of your income is still coming into your household.
So, your workplace pays sick pay, you're covered then, right?
Not necessarily, it's important that you look at how much your company pay and for how long. Your company may offer sick pay as part of their employee benefits package but if that only lasts three months, you should look into providing yourself with further financial protection.
What About If I Have Savings?
Well, of course, you could dip into your savings but we think your savings should be for what you want to enjoy and not spending on gas, the food shop and water bills! If, however, you did want to rely on your savings, make sure you consider how much you have in your account and how much you spend each month on necessities. If your calculations see your savings running low pretty quickly, look into taking out an Income Protection Policy.
How Does Income Protection Insurance Work?
All providers differ on the following:
- Amount of Cover Available
- Pay-Out/Claim Term
- Policy End Age (which can often be dependent upon occupation)
- Reviewable or Guaranteed Premiums
- Additional Benefits, if any
- Premiums
- Criteria to claim against (also often dependent upon occupation)
- Treatment of existing complications and effect on premiums
- Deferment periods (depending on when sick pay from your employer ends or reduces)
Please note for these insurance products terms and conditions apply. This information is a summary only. You will receive a full policy document upon application. This policy will set out the terms, conditions and limitations of cover provided under the plan.
Home Legal Services Liverpool LLP t/a Right Click Finance is an appointed representative of Primis Mortgage Network. Primis Mortgage Network is a trading name of First Complete Ltd which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let Mortgage.
Registered in England OC399498. Registered office address Prospect House Columbus Quay, Riverside Drive, Liverpool, England, L3 4DB
The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers based in the UK.
Home Legal Services Liverpool LLP t/a Right Click Finance is an appointed representative of Primis Mortgage Network. Primis Mortgage Network is a trading name of First Complete Ltd which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate some forms of Buy to Let Mortgage.
Registered in England OC399498. Registered office address Prospect House Columbus Quay, Riverside Drive, Liverpool, England, L3 4DB
The guidance and/or advice contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers based in the UK.