Income Protection Insurance from Drewberry Personal Insurance Brokers.
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Income protection insurance is a form of long term illness protection insurance. An income protection policy pays out a tax-free monthly income directly to you if you are unable to work due to sickness or injury.
Income protection insurance can be taken out whether you are employed or self-employed and can provide financial cover right up to retirement if you so wished.
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Do I need income protection?
What would be the financial impact on you and your loved ones if you were to become seriously ill and unable to work? Would their be enough income/savings to cover your financial obligations and avoid financial hardship? Income protection can offer you peace of mind knowing it will pay out a tax-free monthly income directly to you if you are unable to work long term due to sickness or injury.
How much cover?
Income protection insurance can provide a tax free monthly income of between 50% and 65% of your taxable income, although some providers will offer up to 75%. The level of income protection cover is chosen at the outset of the policy.
Length of cover
You can choose the length of cover your income protection policy provides an a monthly payment should you need to claim.
At the outset of your plan you will decide on the benefit period, the length of time for which you would be eligible to claim should you be unable to work. The period can range from as little as 2 years or 5 years or right up until retirement.
Choosing a benefit period of 5 years means if you need to make a claim the income protection policy will pay out for a maximum of 5 years if you do not return to work during this period.
Guaranteed or reviewable?
Guaranteed premiums ensure the cost of your policy does not increase at any time during the term of the plan.
A plan with reviewable premiums will have a premium rate review every 2 to 5 years.
As you would expect, at the outset the premium for a guaranteed policy is higher than a reviewable plan however over time guaranteed premiums tend to work out cheaper due to their fixed nature.
Deferred period
Income protection plans tend to be structured with a deferred period. It is the period of time from when you are intitially off work to point in time the policy will pay out if you are still off work.
Deferred periods can vary and a choice has to be made at the commencement of the plan, ranging from as little as 4 weeks up to 52 weeks. As expected the longer the deferred period, the cheaper the premiums.
Own or any occupation
Own occupation definition means that the plan will payout if you are unable to work in your own occupation due to sickness or injury. Any or suited occupation definitions are only likely to pay out if you are unable to do any sort of paid work.
Indexation option
An additional option which ensures your income protection cover increases with inflation during the term of the policy.
The amount of income protection cover will increase in line with the retail price index(RPI). Payment protection insurance
An income protection policy is designed to cover long term sickness or injury. If you are looking for a policy to cover you in the short term i.e. 12-24 months then there are alternatives.
To protect a specific debt such as a mortgage in the short term, if you are not in work due to either accident, sickness or unemployment you should consider either an accident, sickness and unemployment policy as an alternative to the long term protection income protection insurance provides.
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need some guidance? |
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Income protection cover or permanent health insurance is a form of long term illness protection. Income protection insurance pays out a tax-free monthly income ... read more
If you are looking to protect your income from the risk of unemployment or more specifically the risk of redundancy then you will want to consider a...read more
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If you are looking for income protection insurance and need some guidance or just require a persona quote comparing all the market leading insurers then let us know.
Call 0800 612 7897 or email personal@drewberryltd.com
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Also known asincome protection policylong term income protection |
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