Every year millions of people find themselves unable to work because of acquiring serious illnesses or injuries. Income protection is designed to provide you with some cover if you cannot earn an income due to those reasons. If in case something happened to you and cannot survive on savings or sick pay from work, income protection is something that you should be thinking of in order to keep paying the bills.


Some benefits of income protection

  • It replaces part of your income.
  • It pays out until you are able to go back to work or until you retire, die or when the policy term ends, whichever will come first.
  • Most of the time there’s a waiting period before the payment begins.
  • It covers almost all illnesses that leave you unable to work either in long or short term.
  • You can claim as many times as you are required to while the policy lasts.


Do I need it?

It does not matter whether or not you have dependents of children, if an illness will prevent you from paying your bills, you should think about considering getting an income protection insurance. You would most likely need it if you are self-employed or employed and your company does not have a sick pay policy that you can fall back on.


Who does not need it?

You may not need an income protection insurance if:

  • You are an individual who can get by on sick pay. For example, if your company provides an employee benefits package which gives pay for about 12 months or more.
  • You can survive on government benefits that can cover all your expenses. There are times though that it may not be enough to cover all your expenses.
  • You have enough savings to support yourself. Remember that your savings can run out and it may need to see you through a long period of time.
  • If you could take an early retirement. If you are near retirement age, maybe you could afford to an early retirement. If you are not able to return to work, you might be entitled to claim your pension early as well.
  • Your family or partner would support you. If your partner or spouse is generating enough income for the two of you and can cover all your monthly outgoings.


How much does income protection insurance cost?

How much you need each month for your premium will depend on the policy you will choose and your circumstances. Normally, an income protection insurance covers a wide array of illnesses and situations and has the potential to pay-out for numerous years. The cost of the policy will depend based on a variety of factors which will include the following:

  • Age
  • Job
  • Whether you smoke or have smoked before.
  • The percentage of your income you’d like to be covered.
  • The policy’s waiting period before it pays out.
  • The range of injuries and illnesses it covers.
  • Your current health condition as well as weight and your family’s medical history.

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