Sudden illnesses, long-term disabilities and injuries can have a devastating effect on many areas of our lives. A report entitled Deadline to the Breadline by Legal & General in 2013 found out a number of alarming things about homeowners:
- Just 8% of homeowners have income protection
- 29 days is the average length of time that the report suggests families could survive without income protection
- 36% of households have no strategy in place to cope with hardships
Income protection is something you may have heard about, but as with many schemes and insurances you may be wondering what it all means. Here are the answers to the ten most frequently asked questions about the insurance policy:
What is income protection?
Income protection insurance is an insurance policy that will pay out benefits to those individuals who are unable to work due to illness, accidents or injury.
Why do people take out income protection insurance?
The wide range of illnesses and injuries that can occur mean that individuals and households choose to take out the insurance in preparation for this potentially happening in the future.
What doesn’t income protection cover?
It is created to work as cover in case of you not being able to work. Therefore, if you are made redundant, the insurance does not cover your income.
Is it the same as PPI or loan insurance?
PPI and loan insurance are focused on the short-term benefits that ensure that you get a boost of help immediately. Income protection insurance, however, is designed to help over the long-term to provide much-needed support.
How much does income protection cost?
It depends where you go and on a number of factors. Our team at MacFarlaine & Brooks are on hand to provide you with help and advice as you look towards the future. It will also be dependant on age, job, smoking, health and waiting period (which is explained below).
How long does it take to secure income protection?
You will set the waiting period following your loss of income. This will generally be set at the point at which your sick pay finishes.
Who is helped by income protection?
The insurance is ideally suited to aid all employees and homeowners to protect against the chance of sickness and ill-health impacting your family financially.
What types of income protection are there?
There are two main types of income protection: own occupation or working tasks. These terms make reference to whether you are prevented from performing any aspect of your job (own occupation) or you are unable to perform day-to-day tasks (working tasks).
Which kind of income protection should I choose?
If you choose to get advice from a professional team, you will be guided through the range of options for you. This depends on your job and your previous medical history among other aspects.
Why take out income protection insurance?
It is a vital way to protect yourself and your family from the risks associated with your daily or working life. If you are struck down by illness and find yourself suddenly without support from this insurance, you could have trouble securing the money you need to survive comfortably each day.
The purpose of this blog is to provide technical and generic guidance and should not be interpreted as a personal recommendation or advice.