Guide to buying income protection

19 Aug

You may not have heard of income protection, but it is actually one of the most important insurance products you can have in the UK. If you were to fall ill and were unable to continue working, how would you meet your monthly outgoings? Whilst the government will pay a weekly benefit to eligible claimants, the maximum amount you can claim is £105.05, and this may not be enough to maintain your monthly lifestyle.

Income protection insurance will replace the majority of your income every month with a tax free benefit until you are well enough to get back to work- making recovery a little bit easier. Here is our guide to finding the right policy for you.

1)      Choose how much of your income you want to replace

When buying an income protection policy you can choose to cover as much of your salary as you want, usually up to around 70% of your gross monthly income. However, the more you choose to insure the higher your premiums will be. If you are unable to work because of an accident or illness, it is likely that your outgoings will be much reduced anyway because you will not be travelling to the office. Tot up how much you spend each month on your mortgage, rent, council tax, bills and other lifestyle costs, and cover as much as you need.

2)      Choose how long you want to be paid for

Think about how long you want your policy to pay out your benefit for. Some policies will only cover you for a maximum of 12 months, regardless of whether you are well enough to return to work after this time. Others will cover you until you get back to work or until retirement age, whichever is sooner. Longer term policies are sometimes more expensive than short term policies, but in the long run they can be a sensible investment.

3)      Choose your waiting period

Your waiting period is the amount of time between you being unable to work and your policy starting to pay out. You can choose a waiting period of 4, 13, 26, or 52 weeks, depending on how long you could survive on your savings or how long you receive sick pay. Obviously, the longer you can go without being paid, the cheaper your premiums will be. Speak to your employer to find out the amount of time you get statutory sick pay for, and design your cover so that it kicks in when this period ends.

4)      Choose your ‘own occupation’

There are a number of different definitions of incapacity you can choose from when buying income protection. Choosing ‘own occupation’ will mean that your insurer pays out if you are unable to carry out your current job because of accident or illness. Other definitions include ‘any occupation’, which mean your insurer will only pay out if you are unable to carry out any job at all. Whilst ‘own occupation’ can be more expensive, if you ever need to claim it will be worthwhile.

5)      Consider redundancy insurance

Redundancy insurance will cover you if you are made involuntarily redundant. This type of policy can be added onto your income protection for an additional premium, but will only pay out for a maximum of 12 months even if you have not found a job after this period of time. Many people find redundancy cover reassuring at times of economic difficulty.

When looking for income protection, make sure you get expert advice from a broker and familiarise yourself with the terminology. Don’t forget, there may be exclusions on your policy which you need to understand to prevent confusion in the future.

Author bio: Chloe writes for ActiveQuote.com, an income protection comparison website and FSA registered insurance broker.

8 Responses to “Guide to buying income protection”

  1. Ernesto February 21, 2013 at 4:50 am #

    I have to be aware of total profit for DIS within the this past year and also the last 5 years.

    I additionally require the same information for SIXF.Doctor, and VTPK.PK.

    Please and thanks!

  2. Tristan February 24, 2013 at 8:20 am #

    1) Help reduce or entirely eliminate taxes around the wealthy, therefore forcing hard-pressed working families to shateringly constitute resulting revenue shortfalls.

    2) Bust labor unions, cruelly stopping the collective negotiating that’s exactly why US employees ever won decent wages and benefits.

    3) Stubbornly deny the presence of ominous global warming while blithely moving more contaminants in to the atmosphere from lucrative, dirty industries and practices. Although trustworthy researchers say 350 carbon parts per atmospheric million may be the safe limit for sustained existence on the planet, Republicans dismiss the frightening proven fact that we are already in a carbon degree of roughly 390 parts per million.

    4) Remove “limited” rules on from investment banks and charge card companies to some broad variety of “profit-deteriorating” consumer protections, departing the American public uncovered to a number of resulting abuses and dangers.

    5) Still criticize and inadequately fund public education, promoting private schooling rather, thus entirely disregarding that progressive public systems are utilized in each and every country which has education final results better than our very own.

    6) Outlaw abortion, within fraudulently moral guise, compelling the united states to bloodily join individuals benighted, backward nations where 1000’s of already-born, living, breathing, socially functioning women perish due to sexist denials of the fundamental reproductive privileges.

    7) Still recite a Pledge of Allegiance whose last six test is “with liberty and justice for those,Inch while remaining numbly oblivious towards the harsh hypocrisy of stopping our homosexual people from getting married to.

    8) Speak frequently and loftily of freedom, but participate in secret wiretapping, repression of domestic dissent, neo-McCarthyite witch tracks, Red-colored-baiting title calling, along with a panoply of Patriot Act transgressions from the Metabolic rate from the U . s . States…all underneath the misused rubric of “national security.”

    9) Show the relaxation of mankind only bullying world-cop arrogance through endless US interventions and aggressions on foreign soil, resulting not only to numerous lives extinguished in indefensible wars, and vast amounts of badly-needed dollars flushed to waste, but constant al Qaeda recruitment against hated Yankee interlopers.

    10) Generally drive lower the earnings amounts of America’s working-class majority, like a purported cost-saving corporate measure, without appreciating that the populace that’s too poor to purchase back what society produces is condemned to economic ruin. A full time income wage may be the ultimate “stimulus,” but try to look for even one Republican who favors it!

    11) Still lie concerning the alternative, affordable healthcare for those that some fifty world nations’ people extremely support, therefore propagandistically leading People in america to consider that getting private insurance whose rates are rising at rates three occasions greater than our pay — and which routinely declines coverage when it is needed most — is in some way more suitable

    12) Release p facto ethnic cleansing against 12 million immigrant males, women, and kids, which makes them contemporary counterparts from the Jewish scapegoats that Hitler blamed for struggles Spanish people experienced throughout a previous duration of capitalist economic distress.

    13) Shamefully attempt to lend credence for their avarice and social irresponsibility by studying the Bible to obscure passages that place human need before abject avarice, trying to transform it into a assisting guide for contemporary peers from the temple moneychangers whose tables Jesus angrily knocked towards the floor (and who unquestionably would not be pointed out within the amended version that certain conservative group is really, amazingly attempting to put in circulation).

    14) Give full vent towards the intensely bigoted hate which has crazed extremists fantasizing of literally tearing Obama to pieces and gassing all liberals…if perhaps they might.

    15) Put the livelihoods and lives well over 300 million People in america at the disposal of incompetent ideological “purists” for example Sarah Palin.

  3. Carmelita March 3, 2013 at 3:04 pm #

    I create a good living, however this year may have near to millions of in earnings. I live fairly conservative and i’m searching for advice regarding how to invest. what will be the most secure and finest return

  4. Simon April 1, 2013 at 11:56 am #

    I’m searching to purchase a home but am not able since i’ve had a BK barely released in 02-08. The region we’re searching is actually listed suitable for us and that we shouldn’t gamble around the market’s future. And So I have labored such a long time and difficult to possibly put lower 30K for any cost of 170K along with a close member of the family would like to invest in it for all of us when we will find a legitimate way to determine some kind of rent to purchase deal….thats where i’m lost….my credit ought to be in appx 18 – 24 several weeks after which i possibly could in some way finance personally. and more importantly the wife of my relative. basically can perform this really is there some type of protection i’d have is that they divorced, died ,etc….not necessarily sure how you can go…..i am unable to even manage to rent within my area, to purchase in some way is appx $300 month less!!!

  5. Louis April 6, 2013 at 10:11 am #

    Why do so difficult to perform a career transition? So why do the shame and blame of history haunt us?

    11 years back I acquired a diploma in microbiology and nine years ago I received my masters in genetics. I’m 33 and that i feel so bad because I’d rather not operate in biology any longer. I simply recognized that career for me personally isn’t about passion or just being interesting, it’s nearly money and versatile time which has not happened for me personally whatsoever. Biology searching means lengthy working hrs , morning hours, nights and weekends, plenty of challenge and never rewarding whatsoever: $2500 after tax which getting a young child whose daycare is $1000 and rent that’s $1200 and vehicle payment that’s $350, you need to do the mathematics!

    I type of wish which i was at fiance or real condition or mortgage or business or perhaps an entrepreneur for financial services or talking to or something like that, however i did not need to expose myself to any or all the harmful toxins and radioactive materials and infections and microbes and explosives and infections, work lengthy hrs, put on an awful lab coat, be humiliated because everybody else appears not to possess a existence and merely study and do experiments, and the actual wondering what the heck I acquired into.

    And today i made the decision to perform a transition and focus my Master of business administration maybe something changes, and so i began it 2 several weeks ago, however i am shameful because my parents continue to be so looking forward to me as being a molecular biologist plus they look down upon me for attempting to try another thing.

    I’m also disappointed at myself for wasting time in something which I should not have began anyways.

  6. Hedwig May 6, 2013 at 2:27 am #

    for guiding America through this terrible publish-hurricane trauma?

    http://gma.yahoo.com/blogs/abc-blogs/gov-christie-praises-leader-obama-124558550–abc-news-politics.html

  7. Ivana May 6, 2013 at 5:35 am #

    I’m wondering, me and my hubby are thinking about purchasing a home around the start of March. There exists a couple charge cards which are fairly low and wish to eliminate them and that we should also remove the relaxation of my vehicle. We’re essentially awaiting our tax in the future in to ensure that we are able to pay everything off first. I’m wondering though, we found a home that people fell deeply in love with and i’m curious if anybody knows should you speak with the vendor and would let them know that you want the home and wished to buy it if there is a means we’re able to put a minimum of some what of the payment lower to ensure that another person does not arrive and purchase it until we’re ready. Call me crazy if you cannot but I’m a first time buyer and I don’t know what all of the rules are. thanks

  8. Marco May 7, 2013 at 4:08 am #

    i’m 12 and am searching to possess money to invest wile traveling

    i’m 13 and am searching to create a nice income for that summer time as i travel

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