From the cost to what it covers, here’s what you need to know about income protection insurance.
Income protection insurance is handy for any working professional. But what is it?
Income protection insurance has been designed to help supplement your income in the event that you’re unable to work because of an illness or injury. In exchange for a monthly or annual fee, your income protection provider will grant you peace of mind that should you face a long-term critical illness or be unable to work for an indefinite amount of time due to an injury, you won’t have to worry about where you’re going to find those cost of living funds.
Interested in taking out an income protection policy? Let’s learn a little more about how it could be a good option for you.
Income protection insurance supplements your salary and is one of the best options for working parents, especially the breadwinners.
Income protection insurance is usually paid out on a monthly basis. Typically, the amount you’ll receive is around 70-75% of your income while you’re unable to work. Income protection insurance has been designed to offer you financial stability so that you can concentrate on your recovery.
From accidents and injuries to critical and debilitating illnesses, there’s a lot that life can throw our way. Income protection insurance gives you that much needed peace of mind. It allows you to spend more time living and less time worrying about the what ifs.
Before taking out income protection insurance, you’ll need to assess your personal circumstances. It isn’t always essential. Income protection insurance could be important if any of the below circumstances apply:
- Self-employed or small business owners: Self-employed people are generally not entitled to sick pay or annual leave. As all days off go unpaid, a self-employed person would usually benefit from income protection insurance.
- People with dependents: Whether it’s your kids, your parents, or a disabled dependent, if you have someone in your life that relies on the income you earn, income protection insurance will offer comfort that you will be able to provide for them no matter what.
- People with financial obligations: If you have any debts, such as a mortgage, that you’ll need to continue to pay even if you’re unable to work, income protection insurance could be your saviour.
To calculate how much income protection you need, start by preparing a budget. This will help you to understand your monthly outgoings and work out the income you’ll need to replace. You may also want to factor in making payments to your income protection insurance provider as well.
Here are a few things to remember to factor into your budget:
- Mortgage repayments or rental costs
- Car finance, insurance and other running costs
- Utility bills
- Food and any other financial responsibilities such as childcare, etc
How much income protection insurance you’ll need is entirely dependent on your personal circumstances.
Income Protection Insurance for Doctors
Typically, most doctors are high-earners which makes investing in income protection insurance an absolute must. Imagine you’re diagnosed with a degenerative disease or critical illness that leaves you unable to work for the foreseeable future. Equally, an unexpected injury could leave you unable to carry out your work obligations. Would your household be financially stable without your income?
Compare income protection insurance for doctors with Mummy Insurance today. Mummy Insurance provides free income protection insurance quotes for mums across the UK. Protect your income from illness or injury!
Income Protection Insurance for Contractors
Contractors usually aren’t constituted to employee privileges such as sick pay and holiday entitlement. With that in mind, income protection insurance could be the ideal security blanket. Protect your income whatever life throws your way and ensure that you and your household have financial stability if the worst was to happen. Compare income protection insurance for contractors today!
One of the major downsides to self-employment is that every day off goes completely unpaid. So, imagine you find yourself in a position where you’re unable to work for a long period of time. What then? Well, that’s where income protection insurance comes to the rescue. It can offer a monthly payment of up to 75% of your declared earnings for the duration of your recovery. Grant yourself peace of mind that your living costs will be covered in every eventuality. Compare income protection insurance if you are self-employed today & protect your income from illness or injury!
The cost of income protection insurance depends on your personal circumstances along with the level of cover required. Typically you can expect to pay somewhere between £10 and £80 per month. A number of factors will impact the price of your income protection insurance policy. These include:
- As a general rule, the older you are the more expensive your income protection insurance policy is likely to be.
- Overall Health: Your medical history will also impact your income protection insurance policy fees. If you have already been diagnosed with an underlying health issue, your policy is likely to be much pricier if available at all.
- Lifestyle in General: Whether you smoke or not, how much you drink on a weekly basis and how active you are will all impact the overall cost of your income protection insurance policy.
Other things that will impact the cost of an income protection insurance policy include the length of the policy and the level of cover. The longer you want a policy to last will ultimately impact the price. As will the level of cover you require, i.e. how much you’ll need the policy to pay out.
Income protection insurance can be taken out in two different ways. It can be purchased alongside a life insurance policy (or added on to an existing policy); or it can be bought separately. The way you choose to purchase your policy is down to personal preference.
Do you want to pay two monthly premiums or one? And is your life insurance provider as competitively priced with their income protection insurance? Those are just two things to think about in the battle of adding it on vs. taking out a separate policy.
DADS
Don’t fret, we have you covered. We have our website for dads which is daddyinsurance.com for all your insurance & personal protection needs. Dads across the UK can compare quotes for free with Daddy Insurance.
