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