Income Protection
What is it?
A policy which pays out a monthly benefit if you are unable to work through illness or accident. The cover normally continues until a chosen retirement age
Who needs it?
Anyone under retirement age whether employed or self employed who would suffer financially if they could not work for a prolonged period
Points to watch out for:
- The definition of when they will pay a claim. Ideally the Insurance Company should pay out if you are unable to carry out your normal occupation and you are not doing y other work
- The amount of cover you take. The Insurance Company usually impose a maximum cover, say 60% of current earnings
- If your occupation or income changes you should tell the Insurance Company otherwise they may not pay out a claim, or you may be paying for excess cover which will not be paid to you
- There is a deferred period before cover becomes payable, the shorter the more expensive the cover, you need to select a period which suits your circumstances
