Nobody plans to be ill and off work for a long period of time, but it is wise to plan for the possibility that it could happen. The best cover for you will protect your income so that essential bills are met and life goes on as smoothly as possible while you concentrate on your recovery.
What is Income Protection Insurance?
Income Protection provides a monthly, tax-free income to help meet your financial commitments if you are unable to work through illness, an accident, or disability. The payments are a proportion of your gross monthly income.
Why do I need Income Protection Insurance?
Because we do not know what is around the next corner. If, for example, illness means you have to take long-term sick leave, the sick pay you receive from your employer will usually cease after six months. The question then is how to cover your monthly outgoings; using your savings perhaps, or relying on your partner or family to help keep things going. It is a stressful situation at an already difficult time. Income Protection relieves financial anxieties, leaving you free to concentrate on making a full recovery.
How much Income Protection will I need?
It is up to you. You should check what employee benefits cover your income since this may have a bearing on what type of Income Protection policy you need. Premier Choice will help you to make an informed choice.
What will Income Protection cost?
Again, it depends on the level of cover you decide you need. It also varies according to the term of the policy, your health at the time you take out the policy, your age, occupation and whether you smoke. The time between your illness beginning and the payments starting is another variable.
What is a Deferred Period?
The deferred period is the time between your claim and payment of the first benefit. Many people receive sick pay from their employer for a time and choose to defer payments from Income Protection until sick pay from their employer stops. The longer the deferred period, the lower the premium you pay.
I get state support. Why do I need Income Protection?
It is unlikely that support provided by the state when you are not working will be equivalent to your salary. Employment and Support Allowance varies depending on your circumstances and how long you have been off work. You need to consider if you and your family could survive on such a low income.
Will I be taxed on money I receive from my Income Protection cover?
No. This is tax-free income.
How long can I claim on the policy?
Until you get better, or until the policy term comes to an end.
Does Income Protection cover me for redundancy?
No. It only covers long periods of illness, time off work due to an accident, illness, or disability.
What happens if my income changes?
Tell us. We will arrange an increase or decrease in your cover to reflect your new circumstances.
I’m self-employed. Can I get Income Protection?
Yes. It’s sensible to consider taking out a policy as a fail-safe if you are unwell and unable to work.
Is Income Protection available to a partner who stays at home?
Yes, though there is usually a restriction on the amount of benefit he or she can receive.
What happens if I become unemployed or decide to take a career break?
It varies from one insurer to another. Some insurers offer a reduced rate while you are not working; others may offer a ‘non-working option’, which suspends payments and cover. If you are planning a career break or think you may be out of work soon, tell us; we can help you find the right cover for your needs.
Is Income Protection the same as Payment Protection Insurance (PPI)?
No. They are very different. PPI is tied to one debt; payments made through PPI go straight to the lender. Income Protection is much more comprehensive and dependable.
How can Premier Choice help me choose an Income Protection policy?
We bring years of expertise and experience in Income Protection. As an independent, we give you completely impartial advice on the policies available from all the major insurers. We will make sure the cover you receive is right for your personal needs, and at the best premiums on the market.
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