INCOME PROTECTION INSURANCE

If you are unable to work because of sickness or disability, you will need some form of income to pay the bills. Income protection insurance can provide this income.

An income protection insurance policy can replace a significant portion of your income, tax-free, until your normal retirement date and can include protection against inflation.

In order to get the right cover for you, consult a financial adviser who places income protection high on his or her own priority list.

A bit more detail…….

If you have other means of financial support for a period of time, you can choose at what point the insurance payments start. The longer you defer the insurance, the cheaper the premiums will be.

If you make a claim under the policy, this does not affect the cost of future premiums, indeed under most policies, no insurance premium is payable while you are claiming, so that is one cost you don’t need to worry about.

When you return to work, premiums resume and the same level of protection is maintained, should you need to claim again in the future.

Warning:

Some products do not always offer the level of protection described here. Make sure that any plan offered to you can pay out until your normal retirement date, or any period that meets your needs and covers all health conditions. Some retailers misleadingly call some products income protection when in fact such cover is more accurately described as accident and sickness insurance.

For more information on income protection, look at the Association of British Insurers website – click here.

INCOME PROTECTION FROM THE EMPLOYER - click here (Warning: This is more for techies)