Hit Life’s Curveballs with Income Insurance
Life sometimes throws us curveballs like illnesses, accidental injuries and unexpected unemployment. If you were to find yourself unable to work, would you be in a sticky situation? If you’d rather not rely on the state welfare safety net or would like further protection, Income Protection Insurance might be right for you. If something should happen and you lose your monthly income but you have one of these policies, then you can claim and be paid out a certain sum to protect you and your family without having to dip into savings, re-mortgage your home or take out over-complicated and high-interest loans.
Get a Policy
Without Income Protection Insurance, there are laws in place to protect you should something happen. If you’re currently employed but fall ill or have an accident, you’re entitled to up to 28 weeks of statutory sick pay, or whatever alternative payment scheme has been laid out in your contract. However, this statutory pay is pretty measly at £79.15 per week and is highly unlikely to meet all of your day-to-day living costs. This is especially troublesome if your illness or disability is chronic and continues past the maximum sick pay point; you may then find yourself relying on government benefits. An insurance policy would be far more likely to cover the expenses that your income was meeting prior to your illness, accident or unemployment and would certainly offer some peace of mind until things improve or a new job is found. This could be especially useful if you’re currently self-employed, as you may find yourself with far less back-up if something were to go wrong than someone who’s covered by a work sickness pay scheme.
“Thank goodness, I have income insurance!”. Dave deep in thought by Lodigs, on Flickr. This work is licensed under a Creative Commons Attribution-NonCommercial 3.0 Unported License.
Compare Policies
When looking for an Income Protection policy, you’ll need to specify the amount you’re currently earning, as the maximum amount you’ll be able to claim is generally the equivalent of your current salary after tax, minus any benefits you begin receiving. When comparing policies, check the length of time that you’ll be covered from the date you make a claim to be sure it offers a period that suits you. Some policies will pay out indefinitely, but most will have a time limit on the claim period. It’s also worth noting that there will be a lag between making a claim and beginning to receive payments; these can range from fairly short waits of about 30 days to 90 days, so be aware when looking for a policy just how long you have to wait, and check that you’ll be financially stable during that time. If you feel less confident that you would be able to wait for payments to begin, make sure you select a policy that pays out more speedily. It’s also wise to confirm that the payments will be backdated up to when you first became unable to work, to be sure that you don’t miss out on any time. Policies will vary based on price, features and restrictions, so get multiple quotes to ensure you’re finding a deal that really suits your needs.
The cost of your Income Protection Insurance will depend on a pretty vast variety of factors. Your age, current state of health and lifestyle will all be assessed, along with the risk associated with your occupation. The waiting period length you’re requesting, length of the policy and the amount of income you’re hoping to cover will also all impact the cost of your premiums. Remember that this insurance won’t cover all eventualities. So be thorough in your quote comparisons and check all the exclusions to be sure that you will be able to claim if you need to.
