Insurance
Income Protection
Protect Your Income When You Can’t Work
If you are unable to work due to illness or injury then Income Protection can provide the financial security to maintain a standard of living whilst you focus on your health.
Income Protection pays you a tax free monthly amount, typically until either you return to work or you retire, although, shorter versions are available.
The flexible features of this income replacement insurance allow you to tailor your policy to meet your requirements in an affordable manner by choosing the amount of pay-out, how long you wait to receive it (known as a ‘deferred period’) and how long you will continue to receive it for.
Who needs Income Protection?
In short, everyone! An income protection policy is essential financial planning whether you are employed or self-employed.
Do you have a mortgage or rent to pay?
Do you have bills and utilities to pay?
Do you have dependents?
Do you eat food?
Employed and receive sick pay?
If you are fortunate to receive sick pay from your employer then income protection can neatly dovetail with this to ensure a continuous monthly payment is received by choosing a ‘deferred period’ to match your sick pay.
Therefore when your sick pay finishes, your income protection will start paying you a monthly income, with the difference being that this payment is not subject to income tax.
Can I claim if I’m self-employed?
Yes, and the self-employed are perhaps the most in need of income protection because if you are unable to work, who is paying you?
In principle the policy works the same as for employed in that if a doctor signs you off as unfit to do your work then a claim can be made.
Careful attention should be paid to how long you could survive without receiving any income and choose a deferred period accordingly. The self-employed should typically opt for a shorter deferred period to limit the amount of time without income or depleting hard earned savings.
