Do I need income protection insurance?

29th March 2020

If you can’t work due to sickness or a disability, an income protection policy will pay you a regular income until you can get back to work or retire. It’s also known as permanent health insurance and, before you take out a policy, make sure that you actually need income protection.

Income protection checklist

  • Some employers provide income protection insurance as a benefit. Check your employment contract or ask your personnel department to see if you’re already covered.
  • Do you have savings you could use to give yourself an income instead of paying for income protection insurance? If you have a long-term health issue, you may not be able to cover your living expenses or emergency care through your savings.
  • Are you already covered on another policy? Some mortgage policies or other insurance policies build in cover for different types of illness, including long-term sickness or critical illness, which only covers a limited range of illnesses. Take a look at your policy or contact your provider to find out if you’re covered or can extend your existing policy.
  • Check the terms and conditions of a prospective income protection policy carefully and ensure that you’re happy to accept the exclusions that may apply. These might include pre-existing medical conditions or family history of some illnesses or if the type of work you do still means you’ll be covered.
  • Can you afford income protection insurance? The costs associated with income protection and critical illness policies can be high – especially if you are older – premiums are age and health dependent.

If you make a claim on your income protection insurance policy, traditionally you’ll have to wait at least four weeks after you stop work before your payments will begin – these waiting periods can last considerably longer so be prepared.  You should also ask if your payments will increase in line with the cost of living and if you’ll have a penalty-free cancellation period should you change your mind.

If you’d like to know more about income protection insurance or critical illness, talk to our team of independent insurance protection advisers who have access to a great range of insurance products to suit your circumstances. Call us on 08454 500200 or click here to make an enquiry.

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April 2020

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