Income Protection Insurance – What is it and how it can benefit you?

As the future seem less uncertain and we move forward in the ‘new normal’, it’s more important to ensure that you are financially stable. One of the ways you can do this is with an Income Protection policy.

This cover type has been around for a while but it has never been more relevant and valuable than now. As we continue our venture in unprecedented global circumstances, Income Protection enters the spotlight.

What is Income Protection Insurance?

When incapacitated or injured and unable to work, Income Protection is a policy that will pay out monthly payments to help keep you going.

What is Executive Income Protection Insurance? Executive Income Protection is a policy that can be taken out by a business to help cover the cost of an employees’ sick pay.

Will Income Protection Insurance cover me if I’m unable to work due to Coronavirus (COVID-19 or any other variant of Coronavirus)?

Yes. If you are signed off from work by a doctor as unable to work or you are an inpatient within a hospital. An Income Protection policy will provide cover and pay out in these circumstance.

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What is covered with an Income Protection Insurance policy?

Each provider has their own criteria but in general, if you are unable to work and signed off or you are hospitalised, they will pay out.

What is covered with an executive income protection policy? An Executive Income Protection policy covers the same events as a regular Income Protection Insurance policy, but the policy is paid for by a company and not an individual. Likewise, any pay-outs will go to the company and not the employee.

What are the benefits of Income Protection Insurance?

For personal Income Protection, the main benefit is financial security. In knowing that you have a certain percentage of your salary safeguarded you can better budget your finances. Being covered will also reduce any financial worries about the uncertainty of the future.

For Executive Income Protection Insurance, employers can offer enhanced sick pay over Statutory Sick Pay without having to bear the full burden of paying out for sick pay. Again, it also allows for better planning and control of the businesses’ finances.

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How much cover can I get with Income Protection Insurance?

The cover amount available depends on your circumstances (i.e. salary, age, etc) and also depends each individual provider criteria. Typically, providers will usually offer cover between 50-70% of your monthly income as a pay out in the event of you being signed off from work or hospitalised.

However with Executive Income Protection, cover can be up to 80% of an employees’ monthly income depending on provider and individual circumstances.

Is there a deferred period for my Income Protection Insurance Policy?

Most insurers will offer a range of deferred periods. However, remember that longer deferred periods will decrease premiums. With Income Protection you choose what deferred period length is applied to the policy.

Can I still get Income Protection Insurance if I’m Self-Employed?

Yes. If you are employed or self-employed, you can get Income Protection. You will have to show proof of your income

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Is Income Protection Insurance the right protection policy for me?

When looking to safeguard your finances to ensure a steady stream of income, Income Protection Insurance is a great choice. Income protection Insurance is ideal if you’re looking to protect against shorter term illnesses and injuries.

Critical Illness Cover is a great choice if you are looking to protect against more serious illnesses, such as cancer.

However, unlike Income Protection, Critical Illness Cover will pay out a lump sum if you are critically ill and unable to work (as opposed to monthly payments for the duration of your illness like Income Protection ).

On the other hand, if you’re not sure what cover would be best, our expert advisers are on hand and can help find the best cover type to suit your needs.

What happens if my insurance provider closes or goes into administration?

In the unlikely event of your provider going into administration, you will be covered under the Financial Services Compensation Scheme (FSCS). All providers that we work with are part of the scheme.

Would you like to find out more?

You can compare the UK’s Top Income Protection Insurance providers & get a personalised quote, use our super quick and easy form.

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Alternatively, if you would like to chat with an expert adviser, leave your details here and we’ll call you back.