Income protection

Income protection insurance pays out an income if you're unable to work for a long period of time because of illness, injury or disability.

Although, the company pays statutory sick pay to most employees, after this you would have to rely on state benefits. Income protection insurance aims to put you in a similar position had you still been in work.

Top tips

  • Check out if your company offers an income protection benefit - if it doesn't, think about how you would cope financially if you were unable to work. You may have to join the pension scheme to take advantage of this benefit.
  • You are far more likely to claim under an income protection policy than a life insurance policy. Make sure you have the cover you need.
  • Some policies offset the income you are getting from other sources against the income it pays you. Check if your policy allows you to receive any other income, for example from other insurance policies.

 

 

  • Income protection usually has a waiting period before it will start to pay out. The longer you agree to wait, the lower your premiums will be, so it's important to find out what income you can get from the company or other insurance (such as mortgage payment protection insurance) during this time.
  • You might not be able to get cover if you have existing health problems or take part in a hazardous sport.

 

 

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