Income Protection Advice
Permanent health insurance
Income protection insurance is the common term for permanent health insurance. It remains in place for the term of the cover, usually to retirement age.
Financial Safety Net
Income protection is about making sure you, your family and your finances have a safety net if life takes an unexpected turn and you are unable to work due to accident or sickness. Let’s face it, statutory sick pay isn’t going to maintain your lifestyle and most employers offer little in the way of enhanced sick pay.
Permanent Health Insurance
Multiple options exist for income protection which is why it is best to discuss your needs with a protection adviser. I can look at your current work place provision, work out your maximum cover amount and apply for the most suitable policy.
Deferment Period
Income protection policies have a deferment period or waiting period. During this period, you can’t make a claim, even if you are ill. The longer the waiting period, the lower your monthly premium. Deferment periods usually align with either your contractual sick pay or alternative funds such as savings.
Pure Protection
Income protection is a pure protection product designed to ensure financial resilience if you cannot work due to accident or sickness. It can provide support through regular monthly payments to replace earned income. I can help you build an income protection plan that ensures a meaningful and robust safety net to keep your financial goals on track if you had to make a claim.
How long does income protection pay for?
Income protection pays out to a maximum age of 70 and has a maximum start age of 60. Policies generally pay for 2 years, 5 years or to retirement. The longer the policy pays out for, the higher the monthly premium. 2 year policies are typically classed as breathing space policies for short term protection.
Whole of market protection advice
After a comprehensive search of providers, the recommendation will be tailored to your specific requirements. I have access to all the main UK providers.
Application
You are not alone to make the application. I will apply for the policy with you and talk through the underwriting questions to ensure accurate information.
Underwriting
Income protection is underwritten at application. This means it accounts for any pre-existing medical conditions and your current lifestyle and BMI. Pure protection policies cannot be cancelled by the insurer for changes to health or lifestyle.
Age costed policy
An age costed income protection policy is typically a low start policy. The premiums are low to start with but increase each year with your age as well as increase due to increased cover. Generally a useful option for young people where budget is key. However, bear in mind that the cost of the cover increases with age and the cost of switching to a none age costed policy further down the line will also be higher.
Other types of cover
Life Insurance
Life insurance, or level term assurance, provides a specific amount of cover for the term of the policy. This can be to provide a legacy for family, to cover debts or the financial shock if you are no longer around. Level term insurance is often taken out in combination with critical illness cover.
Critical Illness Cover
Critical illness cover is a type of insurance that pays out a lump sum if you are diagnosed with a covered condition. Generally speaking, most providers cover up to 60 illnesses. People use these funds for various reasons, including making home adaptations, lifestyle choices such as family holidays or to cover daily expenses.
Some policies also offer serious illness cover. This type of policy pays out a percentage of your cover amount for less serious conditions. There are options to have up to 3 times the benefit amount covered and 178 different conditions.
Family Income Benefit
Family income benefit is a type of life insurance that pays out a monthly income rather than a lump sum. It is generally less expensive than lump sum life assurance and can also be used to provide critical illness cover.
A key use of Family income benefit is to provide an income for children in the event of your death. Parents typically run a policy to their child’s 23rd birthday with a benefit amount that would pay school fees, university costs, driving lessons, the associated costs of “raising kids”. As the payout amount is less the closer the policy is to end date, the monthly premium is lower.