Income protection for Illness or injury

16 September 2019

Have you ever considered what life would be like should you become ill and are unable to work? How will your mortgage be paid off? How will you maintain your standard of living if you are no longer receiving an income? Do you want to be worrying about where your income will come from instead of focusing on your own health? 

With one in two of us possibly getting a serious illness, such as cancer during our lifetime, it is important to think about protecting your income and standard of living, especially if you have a family to consider. 

Who Does it Apply to? 

You can apply for income protection if you are self-employed or are in full or part-time employment. It is particularly important to have this type of cover if you are self-employed as you will not be able to fall back on any employee benefits such as sick pay should you fall ill, and state benefits will not normally cover your standard of living.   

What is the Difference Between Income Protection & Critical Illness Cover? 

You might be thinking that you are covered by your critical illness policy. However, critical illness cover offers a one-off lump sum payout which could be used to pay off your mortgage, for example. 

An income protection plan will pay out a percentage of your income on a monthly basis, if you are unable to work. This type of plan is designed to help pay off monthly commitments like mortgage repayments, bills etc. It also pays out as a percentage of your current income, whereas critical illness cover pays out as a set lump sum. Critical illness policies only pay out once after a critical illness.  Income protection plans can pay out a second claim following a different illness or injury. 

Flexible Plans to Meet Your Budget 

Income Protection plans can be flexible to ensure that monthly premiums can meet your budget by choosing a longer waiting period before you receive the agreed benefits or benefits that pay out for a limited period. The monthly benefit is normally capped at around 70% of your monthly income. Most insurers now allow online applications making the whole process smoother and quicker. If you have a health issue, we can usually get a preliminary decision before a full application is made. 

Simon Harnaman, director of Absolute Wealth Management, strongly believes that income protection should play an important part in an overall financial plan. “Most individuals and families experience some form of financial instability during their lives. Income protection helps smooth those financial worries and allows the individual to focus on rebuilding their future.” 

For a no obligation review of your protection requirements, please contact our office on 0117 907 1965 or email info@absolutewm.co.uk to have a chat or make an appointment.  

Categories: Advice, critical illness insurance, life protection