INCOME PROTECTION
There are other products available designed to protect you against loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]
WHAT IS INCOME PROTECTION INSURANCE?
Formerly known as permanent health insurance (PHI), long-term income protection (IP) is an insurance policy that pays out if you’re unable to work due to injury or illness. You may have seen the Paul Whitehouse-fronted Aviva advert, or Unum’s Back-up Plan adverts – both promoting income protection.
IP usually pays out until retirement, death or your return to work, although short-term IP policies are now available at a lower cost. IP doesn’t usually pay out if you’re made redundant, but will often provide ‘back to work’ help if you’re off sick.
Millions of us have policies like private medical insurance & Life cover. The one protection policy every working adult in the UK should consider is the very one most of us don’t have – income protection.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]
HOW MUCH DOES INCOME PROTECTION PAY OUT?
Income protection payouts are usually based on a percentage of your earnings: 50% to 70% is the norm. Payments are tax-free.
IP policies only pay out once a pre-agreed period has passed, generally ranging from one to 12 months after you put in a claim. The longer the ‘deferral’ period you choose, the lower your premiums. The default deferral period tends to be 13 or 26 weeks.
Most IP providers report paying high proportions of claims made to them. For 2012, insurance giant Aviva published that it had paid 93.5% of IP claims whilst LV= paid 88.4%. British Friendly and Friends Mutual paid out 97% and 98% respectively medical insurance & Life cover. The one protection policy every working adult in the UK should consider is the very one most of us don’t have – income protection.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_separator color=”grey”][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]
GUARANTEED RENEWABLE AND AGE-RELATED IP
Once you’ve chosen the type of policy that meets your needs, there are three price bases to choose from:
• Guaranteed: The amount you pay stays the same throughout the policy term. The premium will only go up if you increase the cover. Most cost slightly more to start with, but we believe they are best if you can afford the extra cost. For a forty year-old, non smoking administrative clerk covering a payout of £250 per week, a guaranteed IP premium will typically be between £25 and £40 a month.
• Reviewable: These policies tend start a little cheaper than Guaranteed policies, but the premiums are reviewed after a set period – typically every five years – at which point the provider can increase the amount. Some insurers reserve the right to increase your premiums with as little as 30 days’ notice on a reviewable policy.
• Age-related: These policies are good for people in higher-risk jobs or for smokers because these factors aren’t always taken into account when deciding the premium. Often starting off cheaper than guaranteed and reviewable policies, the catch is that the premium will go up each year as you get older. However, unlike reviewable policies, the age-related price increases are calculated and agreed with you when you take out the policy – so you won’t be caught out by any unexpected price hikes.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_single_image image=”1996″ alignment=”center” border_color=”grey” img_link_target=”_self” img_size=”900×675″][/vc_column][/vc_row][vc_row][vc_column width=”1/1″][vc_separator color=”grey”][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]
WHY DO I NEED IP?
According to research by Unum and Personnel Today, just 12% of employers support their staff for more than a year if they’re off sick from work. Given the low level of state benefits available, everyone of working age should consider IP, but when we asked the public, just 9% said they have some form of IP, compared with 41% who have life insurance and 16% who have private medical insurance (PMI).
One industry survey showed less than a quarter of people deemed protecting their income to be essential, compared with 74% who said the same of needing access to broadband internet.
Is income protection the same as PPI?
Let’s be clear – income protection isn’t the same as the widely mis-sold payment protection insurance (PPI). Where PPI covers a particular debt and any payouts go to your lender, income protection hands you a tax-free percentage of your income if you’re unable to work due to illness or injury. How you spend the money is up to you.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text]
TYPES OF INCOME PROTECTION
There are three types of policy you can buy to protect your income if you’re unable to work due to illness or accident:
• Long-term income protection: This type of IP policy pays out until a fixed age, death or your return to work. It’s underwritten at the point of applying for the policy, rather than when you put in a claim. This means you’ll know exactly what you’re covered for from day one, as well as any pre-existing conditions you’re not insured for.
• Short-term income protection: Like long term income protection, this type of policy is fully underwritten when you take out the cover. However, rather than pay out until death or retirement, short term income protection, known as Stip, has a fixed maximum payout period of between one and five years.
• Accident, sickness and unemployment (ASU) cover: ASU providers may screen potential customers, but do not conduct full medical underwriting at outset. Cover tends to be cheaper than IP, but you have less certainty that you’ll be covered when you come to put in a claim. As the name suggests, ASU policies cover you for unemployment.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/3″][vc_column_text css=”.vc_custom_1406290312673{padding-top: 1px !important;padding-bottom: 5px !important;padding-left: 10px !important;background-color: #00137f !important;}”]
GET A QUOTE
[/vc_column_text][vc_column_text]It’s easy to get a quote for our life insurance products online. Just choose the type of life insurance that suits you, decide how much cover you need and you can get an immediate decision today.Choose a product and get a life insurance quote ![/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text css=”.vc_custom_1406290322110{padding-top: 1px !important;padding-bottom: 5px !important;padding-left: 10px !important;background-color: #00137f !important;}”]
REQUEST A CALL BACK
[/vc_column_text][vc_column_text]Not sure where to start or what type of life insurance is right for you? Our Help Me Decide section provides a range of tools and information to give you the help you need.Help me decide ![/vc_column_text][/vc_column][vc_column width=”1/3″][vc_column_text]
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