Sickness cover as a short term income protection product is commonly referred to as accident, sickness and unemployment or mortgage protection insurance. It is a policy designed to protect your monthly financial obligations such as your mortgage or other loan payments if you are unable to work due to illness, injury or unemployment.
Short or Long Term Sickness Cover
Are you looking for a policy that will provide monthly payments should you be unable to work for a short period say up to two years or do you want a plan which would cover you to retirement. Although we commonly think of sickness cover as a accident, sickness and unemployement cover some individuals are looking for a level of protection beyond the 12 to 24 months such a policy provides.
If you are looking for a greater level of cover an alternative is income protection insurance, such a policy can provide a monthly income of up to 65% of your gross earnings should you be unable to work due to illness or injury and the payments can continue right up until retirement should you be unable to return to work. These policies tend to provide cover for a minimum of 5 years and provide protection for sickness and injury only.
Sickness Cover Factors
Length of cover
Concentrating on short term accident, sickness and unemployment policies you will have to choose a length of cover of either 12 or 24 months. The longer the period of payment the greater your monthly premiums due to the additional cover provided.
Level of cover
With a short term sickness cover policy you are likely to be able to cover up to the lesser of £2,000 per month or 65% of your gross monthly earnings. If you are looking to purchase a policy but do not have a mortgage your benefit limit will tend to be restricted to £1,850 or 65% of your gross monthly earnings.
Deferred period
The deferred period is the time period form which you are initially off work to the day you receive a benefit payment. Most short term sickness cover plans have a deferred period of either 30 or 60 days with options to pay the benefit back to day one. There are a number of insurers who offer policies which have no deferred period, as you can imagine the longer your deferred period the less likely the insurer will have to payout and thus the cheaper your premiums.
Age
Unfortunately a factor we are unable to control at least with current technology. There is no denying it the older we get the more ailments we tend to suffer and the more likely we are to require time off work. Insurers factor this the quotes which means the older you are the more expensive your policy
Occupation
While the majority of us are working full time, your occupation may well be very different to the next indivdual, more stressful, and higher risk jobs can lead to quotes with inflated premiums to take account of the additiona risk.
Next steps
If you are looking to protect your income, whether in the short or long run and you require further information or want a chat to dicuss your situation then please do get in touch. We are experts in insurance and thus can help guide you finding the right policy at the best price. Saying this if you know the products and know exactly you want you can submit your details for a mortgage insurance quote .
You can find other useful consumer resources in the insurance section of the DirectGov website.
