Do you need Income Protection?
We are used to insuring our house, our car and even our boiler whilst accepting the fact we may never make a claim. What we often ignore or decide not to insure is the means to pay for all the other things in our lives: our income.
What is Income Protection?
Income Protection is a way of keeping our finances healthy when we are poorly. It pays out if during the policy term, you can’t work and suffer a loss of earnings due to illness or injury. You decide at the outset how long you would like the cover to run and after how many weeks of illness you wish the benefit to start paying out.
What are the terms?
The benefits paid from a personal income protection plan are tax free, so the value in a person’s hand of the benefit can typically be around 75% of their net earnings. The cap is intentionally set a little below the net pay from the income being replaced to ensure the individual is not dis-incentivised to return to work.
Different plan terms are available to target different ages and as each plan is underwritten, there are various lifestyle and medical conditions that can affect the premium.
For a 40 year old accountant who is a nonsmoker with no pre-existing medical issues, £24,000 per annum of cover, payable up to age 68 (presumed State Pension age) after a 13 week deferral period could be bought for as little as £35.30 per month**.
How can we help?
We work with individuals, business owners and professionals throughout the various stages of life.
If you would like to take out Income Protection we can advise on the providers and policies that best suit your particular circumstances.
**Income Protection quotes obtained from IRESS Exchange – 23/08/2019