Income protection, when work has to wait.
If illness or injury prevents you from working, income protection can replace part of your monthly earnings after an agreed waiting period. We’ll help you decide how much it should pay, when payments should begin and how long they could continue.
- Cover built around your sick pay, savings and commitments
- Policy definitions and waiting periods compared
- Advice with no separate fee and no obligation
As with all insurance policies, conditions and exclusions will apply.
What is income protection, and might I need it?
Income protection replaces part of your monthly earnings if illness or injury leaves you unable to work. After an agreed waiting period, it pays a regular income to help cover the mortgage, household bills and everyday costs.
Most policies cover a percentage of your earnings rather than your full salary. The amount available depends on the insurer, your income and how it is assessed.
If you pay the premiums personally from taxed income, payments from a successful claim are normally tax-free. Employer or company-funded cover can be treated differently.
Income protection does not usually cover redundancy or unemployment. You would need separate cover for that.
It could be suitable if:
- You are self-employed and have no employer sick pay
- Your employer provides limited sick pay
- Your savings would not support you through a long absence
- Your household depends heavily on your income
- You have a mortgage or other commitments that would continue if you stopped working
When would payments begin?
The time between becoming unable to work and receiving your first payment is called the deferred period.
Before choosing one, check exactly what sick pay your employer provides and how long your savings could support you. Deferred periods commonly range from a few weeks to a year. The longer you wait, the lower the premium will generally be.
The aim is to arrange the policy so that it begins when your sick pay or savings run out, without leaving a gap you cannot afford.
How long would it pay?
This depends on the payment period you choose.
- Short-term cover commonly pays for one, two or five years per claim.
- Full-term cover can continue until you recover, return to work or reach the end of the policy term, provided you continue to meet the claim conditions.
A short payment period can make the policy cheaper, but it is not the same protection. The difference matters if you are still unable to work when those payments end.
The claim definition matters.
Not every policy uses the same test to decide whether you are unable to work.
- Own occupation assesses whether you can carry out the essential duties of your usual occupation.
- Suited occupation may require you to be unable to do another job suited to your experience, education or training.
- Work tasks assesses whether you can complete a list of everyday work-related activities.
These definitions can make an enormous difference at the point of claim. We compare the wording as well as the monthly premium.
Things worth thinking about.
- How much would you genuinely need each month?
- When would your employer’s sick pay end?
- How long could your savings support you?
- Would you want payments for a fixed period or until retirement?
- Should the cover increase over time to help keep pace with rising costs?
Everyone’s circumstances are different. We will build the cover around your income, occupation, existing benefits and budget, then explain exactly what it would and would not cover.
Protect your income if you can’t work
We’ll help you work out how much monthly cover you might need, when payments could start and how long they could continue, based on your sick pay, circumstances and budget. Your first conversation is free, with no pressure to proceed.
Call 01225 258900Questions
Your income protection questions, answered.
How much does income protection pay?
Income protection normally covers a proportion of your earnings rather than your full income. The maximum amount and how earnings are calculated vary between insurers and can depend on whether you are employed, self-employed or a company director.
Where premiums are paid personally from taxed income, claim payments are normally tax-free. Employer or company-funded policies can be treated differently.
What is a defered period?
The deferred period is the time between becoming unable to work and the policy beginning to pay. Options commonly range from a few weeks to around a year.
A longer deferred period will generally reduce the premium. Ideally, it should be aligned with your employer’s sick pay, savings or other income so that you are not left with an unaffordable gap.
Do I need income protection if I am employed?
That depends on your employer’s sick-pay arrangements, your savings and how long you could continue meeting your commitments without your normal income.
Employer sick pay can be valuable but is usually limited. If you are self-employed, you will not normally have employer sick pay, which can make protecting your income particularly important.
What is the difference between income protection and critical illness cover?
Critical illness cover can pay a lump sum following diagnosis of a condition covered by the policy.
Income protection can provide regular payments when illness or injury leaves you unable to work and you meet the policy’s claim definition. Payments may continue for a fixed period or potentially until you recover or the policy ends, depending on the cover selected.
Ready when you are.
Whether you’re arranging a mortgage or protecting what matters, tell us what you need and we’ll explain your options clearly. Your first conversation is free and there’s no obligation.
