Income protection is designed to help you financially if you are unable to work due to sickness or injury. Pay-outs are tax-free and made monthly, to replace part of your income whilst you’re not able to work. These payments will typically continue either until you return to work, or your policy end.
Typically, income protection policies have conditions attached. One common condition is that the policyholder must be employed. If you are made redundant, you are not able to make a claim. There is often a waiting period – this means that you are not able to make a claim for this period after you stop work. Typically this waiting period is 4 to 12 weeks. Some medical conditions may be excluded, including pre-existing conditions.
When the unexpected happens, rendering you unable to work, income protection provides peace of mind. It will ensure you’re able to meet the needs of any dependents whilst you’re not working. Whilst your whole salary is unlikely to be covered, it may help cover monthly expenses you’re unable to miss. It will hugely lessen the financial burden on both you and your family through this time.
Benefits of income protection cover
Ongoing monthly payments
As pay-outs for income protection policies are monthly, tax-free payments, it provides ongoing financial support for your family. This can be used to cover some of your day-to-day expenses whilst you’re unable to work.
Financial peace of mind
Income protection cover will provide peace of mind to you and your family in your time of need. It will enable you to recover without undue worry and stress about how financial commitments will be met. You’re also less likely to return to work before you’re ready, without financial issues playing on your mind.
Wider range of illnesses covered than with other protection policies
Income protection has greater flexibility than other forms of protection. For example, Critical illness cover offers a tax-free lump sum payment upon a successful claim. However only a specific list of illnesses are covered by this protection cover. Income protection, on the other hand, does not have a specific list of illnesses.
Whilst there may be medical conditions excluded, such as pre-existing conditions, income protection will pay-out for most illnesses that renders you unable to work, so long as it meets the definition of illness detailed in the policy.
Why you should opt for income protection cover
If your family rely on your income to cover household outgoings, income protection is a safety net that will provide peace of mind. Payments can be used to pay household bills, mortgage or rent payments, or credit card bills, for example.
If you do not have savings, periods where you’re unable to work could be financially stressful for you and your loved ones. You should also check with your employer to see what sick pay benefits you have. If they do not provide payments for a significant duration, additional cover such as income protection may be required. Statutory Sick Pay may not give you enough income to cover your financial obligations if you’re unable to work for a long period.
How Bell Mortgage Solutions can help
With a number of protection policies available offering financial support in your time of need, you may be confused about which is right for you. Our team will discuss your requirements with you, and offer our expertise in signposting you to the correct policy.
Contact us to speak to a member of our team, and discuss your protection product needs.
Read the answers to our frequently asked questions about income protection here.
Bell Mortgage Solutions 