10 most frequently asked income cover insurance questions
What’s your backup plan if you get sick or injured? Statutory Sick Pay won’t cover everything. Income protection bridges the gap, keeping your finances afloat.
Income protection? It’s not a luxury. It’s a necessity.
- What is income protection insurance?
Income protection insurance is a vital policy that guarantees a monthly payment if you are unable to work due to illness or injury. It effectively covers essential expenses such as mortgage payments, rent, and utility bills, ensuring your financial stability during challenging times.
2. Do I need income protection insurance?
If you’re unable to work due to illness or injury, you may be eligible for Statutory Sick Pay (SSP). However, this is only payable for up to 28 weeks. If you’re off work for longer than this, you may need to rely on savings or other sources of income. Income protection insurance can provide a financial safety net if you’re unable to work for an extended period.
3. How much cover do I need?
The amount of cover you need will depend on your individual circumstances. You should consider your essential outgoings and how long you could manage without your income. You can normally insure up to 65% of your pre-tax salary.
4. How much does income protection insurance cost?
The cost of income protection insurance will vary depending on a number of factors, including your age, health, occupation, and the amount of cover you need. You can get a quote from an insurer or broker to find out how much it would cost you.
5. What is a deferred period?
A deferred period is the length of time you have to wait before you can start receiving payments from your income protection insurance policy. The longer the deferred period, the lower your premiums will be.
6. What is the difference between income protection insurance and critical illness insurance?
Income protection insurance pays out if you’re unable to work due to illness or injury, while critical illness insurance pays out a lump sum if you’re diagnosed with a specified critical illness.
7. Can I get income protection insurance if I’m self-employed?
Absolutely! If you’re self-employed, you can definitely get income protection insurance to safeguard your financial future. Just be ready to provide proof of your income when you apply. It’s a smart move to ensure you’re covered!
8. What happens if I change my job?
If you decide to change your job, it’s important to inform your insurance provider as soon as possible. This is because your premiums may be affected by the nature of your new occupation. Different jobs carry varying levels of risk, which can influence the cost of your insurance coverage. Keeping your insurer updated ensures that your policy remains accurate and that you are adequately covered.
9. Can I cancel my income protection insurance policy?
Yes, you can cancel your income protection insurance policy at any time. However, you may not get a refund of any premiums you’ve paid.
10. Where can I get more information about income protection insurance?
To obtain comprehensive information about income protection insurance, consider reaching out to various sources such as insurance companies, professional brokers, or qualified financial advisors. These experts can provide valuable insights into policy options, coverage details, and how income protection insurance can safeguard your financial well-being in case of unexpected events that may affect your ability to work.
Important Note: It’s always best to speak with a financial advisor who can assess your specific needs and help you find the right income protection policy. They can also explain the different types of policies, the exclusions, and the terms and conditions in detail.
