Income Protection
This provides income where you are ill or injured, and as a result your income through employment or your normal route stops. If Houseperson’s cover is included, then it will pay out upon illness or injury, irrespective of any income stopping. Being unable to work through sickness or injury is one of the most likely occurrences in your working life.
It is designed to replace most of your net income.
Could you cope without getting paid?
Cover lasts for either a set term in whole years, or to a given age (typically your state retirement age). The amount you pay is called the premium. It can either be guaranteed not to change, or it can be reviewable. Reviewable cover normally changes based on the claims experience of the life assurance company.
The plan will have no cash in value at any time and will cease at the end of the term. If premiums are not maintained, then cover will lapse.
Frequently asked questions
- Am I guaranteed to get cover?
No. Income protection depends on your health at the time of application. You will need to provide medical history information.
- Is the benefit payable free of tax?
If this is a personal policy then yes, the income payable is free of tax. If the policy is through your employer the benefit could be subject to income tax.
- Will the plan pay out immediately?
This depends on your cover. You can set a deferred period where the plan will not pay out for a set number of weeks. You can choose to have day one cover which means it pays out immediately.
- Can I make multiple claims?
If you claim on your policy then return back to work, as long as you’re still paying your premiums, your policy will remain in place. That means you can claim again should you be unable to work again in the future.
