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Compare income protection insurance
What is income protection insurance?
Income protection insurance will provide you with financial support if you find yourself unable to work, due to an accident or illness, or if you’re made redundant. You can get short-term or long-term policies, depending on your needs.
Do I need it – income protection insurance cover?
You might have savings to fall back on, an adequate company redundancy package, or company sick pay that’ll cover illness in some circumstances.
But unemployment protection will help you to maintain your lifestyle and pay the bills if you can’t rely on it, either in the short or long term.
Short term income protection insurance or long-term income protection?
Long-term unemployment protection typically covers you for illness or injury. It pays out until you can work again, or until you retire, die or the policy ends.
Short-term income protection can also cover involuntary redundancy, but will only pay out for a set period of time, such as 12 months.
Types of income protection insurance
There are several options when it comes to choosing your income protection policy – you need to think about what you need from yours and pick the right type.
Accident and sickness
Covers if you if an illness or injury prevents you from working. You won’t be covered if you’re made redundant though.
You’ll only be covered if you’re made involuntarily redundant. This won’t provide any cover if you’re dismissed or leave your job voluntarily, or if you’re ill or injured.
Accident, sickness and unemployment
This is the most comprehensive type of unemployment protection, giving cover for voluntary redundancy, illness and accidents that prevent you from working.
If you want the peace of mind that your premiums will always stay the same unless you increase your cover, choose a guaranteed policy.
Reviewable policies might have cheaper premiums at the outset, but your insurer will regularly review your policy, so they could increase over time.
Age-related policies have premium increases in line with your age, but they aren’t affected by your lifestyle or occupation.
What will my income protection policy cover?
Depending on the type of policy you pick, income protection could cover you for accidents, sickness and/or unemployment, whether you’re in regular employment or are self-employed. If you don’t make a claim, you don’t get a pay out at the end of your policy.
How does income protection work?
After you’ve made a claim, your income can either be paid out straight away or after a set amount of time, such as after your workplace sick pay runs out (it doesn’t affect your sick pay). Your income will be paid, tax-free, until you get back into work or for however long the term lasts.
What kind of cover do I need?
Think about how long you might need the policy to pay your wage and how much of your wage you’d like to be paid. Most insurers will only pay out up to 70% of your annual wage.
How much is income protection insurance?
This depends on various things like your age, smoker status, income needs and length of cover. For a personalised idea, get a quote from us.
Can I have more than one income protection policy?
Yes, as you may need different policies to protect different things, for example, payment protection insurance (PPI) and mortgage protection cover. Remember that the benefit amount you receive from your income protection will be reduced, depending on the compensation you get from other policies.
Can I claim income protection insurance as a business expense?
Popular income protection policies include Lloyds Bank income protection insurance policy options, Barclays critical illness cover policies, Post Office insurance if you have an accident or illness, Legal & General long period income protection insurance and Nationwide to cover loss of income.
Common waiting periods of TSB age-related policies, Barclays Bank accident and sickness insurance products, Post Office continue to pay your mortgage if you lose your job insurance, Legal & General monthly outgoings insurance products, Bank of Scotland wider range income protection cover and Nationwide Building Society income protection policies are 10 days, 12 days and 70 days.
Tough to insure of LV= lifetime protection insurance, More2Life permanent health insurance, One Family serious illness income protection insurance products, Yorkshire Bank 12 months cover income protection insurance, Royal London serious illness income protection insurance products and Sun Life living costs insurance cover products are 15 days, 14 days and 75 days.
Challenging to insure of Virgin Money nurses serious illness income protection insurance products, Direct Line monthly outgoings insurance products, Leeds Building Society permanent health insurance, Skipton Building Society deferred period income protection policies, West Bromwich Building Society deferred period income protection policies and Cumberland Building Society long period income protection insurance are 40%, 60% and 65%.
Difficult to insure occupation variants can include Data and compliance managers, Air ambulance doctors, Actuaries, economists and statisticians, Associate development managers and Radio producers.
Difficult to cover job types include Police officers, Telecommunications engineers, Music supervisors, Teaching assistants and Vloggers: graphic design.
Challenging to cover occupation variants include Pre-press technicians, Creche assistants, Property, housing and estate managers, Radio and podcast presenter and App developers.
Tough to cover occupation types include Rail and rolling stock builders and repairers, Engineering technicians, Senior researchers, Managing directors of a start-up companies and Farmers.
Is it worth getting income protection insurance?
Yes, for many people it is including uber drivers even. It’s especially important for people with very little savings.
What does an income protection policy cover?
Some people like long term income protection insurance, but worry about the cost of income protection insurance.
What is minimum income protection?
It’s just to cover basic monthly outgoings and is not for high earners.
What types of income protection are there?
Who is Income Protection Benefit for?
It’s for people that want cover if they get sick or are unable to work. Even people running a small business can get it.
What does Illness and Injury Insurance cover?
As long as your claim is genuine, it covers illness and injury if you are unable to work. Businesses sometimes buy key person insurance.
What is income protection insurance?
It provides an income for you in the event you can’t work.
How does income protection work?
Why do I need income protection insurance?
If you don’t have insurance and you get ill or injured you may have important bills you are unable to pay.