Understanding Income Protection
Income protection is your safety net in times of illness or injury, providing monthly salary replacement of up to 60% if you’re unable to work. It goes beyond mere financial assistance, ensuring your wellbeing with rehabilitation, physiotherapy, and mental health support. With customisable options, it’s tailored to fit your unique needs.
Why You Need It
Income protection ensures your bills, car payments, savings, investments, and pension contributions are covered. This stability is crucial for preserving long-term wealth, shielding you from unforeseen health events.
An income protection policy also provides additional support to get you back to your full earning potential. However, in the event of prolonged inability to work, the policy provides payouts after a specified period, for a predetermined duration, or until your return to work.
The Importance of Acting Sooner Rather than Later
Let’s take a look at a real-life enquiry:
A young professional in the legal sector, self-employed and lacking financial security in the case of inability to work, called us to arrange income protection.
During our initial consultation, the client disclosed a history of mental health concerns. Despite effective management of her mental health, she couldn’t obtain insurance until a set time had passed since her last treatment.
In another more extreme case, we’ve seen protection declined for a young, healthy individual who had experienced sudden brain trauma before the age of 30, rendering them uninsurable.
Insurance applications involve underwriting, where your financial situation and health history are assessed. Once terms are accepted, the policy becomes active, with premiums locked in for the duration, up until the age of retirement.
Unlike car insurance, policies don’t renew annually with increased premiums. Hence, applying for insurance early and in good health ensures favourable premiums throughout the policy term.
How Expensive is Income Protection?
Policy premiums vary based on factors like age, profession, and health status. Here is an example of a standard term policy:
- Gender: Female
- Age: 30 years old
- Income: £60,000 per annum
- Employment Status: Self-employed
- Target Retirement Age: 65
- Cover: Standard premiums guaranteed throughout the term
- Monthly Benefit (on a level basis): £3,250 if unable to work
- Premium: £30 per month
Income Protection Policy Perks
Income protection isn’t just about financial assistance. It offers a range of benefits such as hospital stay coverage, return-to-work assistance for lower-income, flexibility to adjust your cover, annual health checks, mental health support, second medical opinions, 24/7 medical assistance, bereavement support, and physiotherapy.
With these comprehensive perks, it provides invaluable support to help you navigate through life’s challenges with confidence.
Secure Your Future Today
Acting sooner rather than later is crucial for securing favourable premiums and comprehensive coverage with income protection. Whether you’re self-employed or employed, young or in your prime years, income protection can provide invaluable support.
To explore tailored income protection options and secure your financial future, please don’t hesitate to get in touch.
Please note: This is for educational and informational purposes only. While efforts have been made to ensure accuracy, it is not financial, legal, or professional advice. Readers should seek appropriate professional advice before making decisions based on this information.
