Income protection insurance - What you need to know
If you opt for all three elements of an income protection insurance policy (Illness - sick and unable to work, Accident - had an accident leaving you unable to work or Unemployment - become unemployed) it'll be there to help pay your bills so that you can maintain your standard of living while you're not able to work.
By paying a monthly premium, if any of those circumstances happen, your income protection policy will kick in to allow you to cover your bills, such as:
- Monthly mortgage or rent
- Loan and credit card payments
- Utilities, TV license etc.
Which type of cover?
There are many different types of income protection you could opt for, each covering something different like a loan or your income.
The different cover types available include:
- Accident insurance - if you tailor your policy for this, it'll cover you should you be unable to work after having an accident or prolonged illness. The policy could pay up to 70% of your monthly gross income and is designed to cover your main financial commitments like your mortgage or rent and household bills etc
- Bill protection - this does exactly what it says on the tin, covers your monthly bills like loans, credit cards and household bills. This policy typically runs for 12 months and will start if you have an accident, have a prolonged illness or become unemployed (as long as you've selected the right type of cover)
- Loan protection - if you're unable to work because of having an accident, having a prolonged illness or becoming unemployed, this policy could cover your loan repayments and other financial commitments if you're unable to work
- Mortgage protection - much like the others, this policy comes into effect if you're unable to work due to an accident, sickness or unemployment. At that point, it could pay your mortgage for 12 to 24 months (or less if you're able to go back to work sooner)
- Salary protection - this policy could replace up to 70% of your salary, should you become unemployed (involuntarily) and could be used to cover your household bills, mortgage, food, travel etc
- Sickness insurance - a sickness policy could provide you with short-term cover for up to 12 months, alternatively, a long-term policy could cover you right up until retirement age, this could give up up to 70% of your salary, should you become sick long-term
- Unemployment protection - if you've become involuntary redundant, this could give you up to 65% of your gross income each month, for up to 12 months or until you find another job. However, this wouldn't cover you if you've been let go for under-performing, dismissed, or if you decide to leave
Compare quotes for each cover type by clicking the 'Get a quote' button at the top of the page.
Long-term or short-term?
We compare two different types of income protection, long-term and short-term. You can pick which you'd prefer during your quote, but what's the difference?
- Long-term - these policies tend to carry on until either you're able to go back to work, or you retire and give you a tax-free regular income
- Short-term - typically, these policies will only pay out for up to 12 months, as opposed to until you're fit to return to work, or retire (i.e. a long term policy)
While your policy is paying you a regular amount of money, depending on who your policy is with, you could still able to claim sick pay and any other benefits you're entitled to.
Customise your quote
As well as picking between long-term and short-term income protection policies, you can also tailor your quote to your needs, defining things like:
- How long you want the cover to pay for
- How much cover you want, depending on who your policy is with, this could be as much as £15,000
- The circumstances you want to cover to protect your bills, lifestyle, income and mortgage
To go ahead and get a quote, click the 'Get a quote button'.