Income Protection
Income protection can replace part of your earnings if illness or injury means you cannot work, subject to the policy’s definition. Payments normally start after an agreed waiting period, rather than immediately when your income stops.
The amount, waiting period and length of payments all matter. We’ll consider your work, sick pay, savings and regular commitments when discussing cover. It does not normally cover redundancy, and it is not the same as insurance for a particular loan repayment.
Cover usually replaces a proportion of earnings, not your full salary. The insurer’s calculation, income evidence and other benefits can affect the amount payable. Choose a realistic level against essential spending and check the policy’s limits.
The agreed delay before payments begin is often called the deferred period. Consider how long sick pay or savings could cover your outgoings. A longer wait can change the cost, but leaves you funding that period yourself.
Some policies limit each claim to a set period; others can continue longer, subject to the terms. Payments may end when you recover, reach the chosen end date or meet another stopping condition. Compare this separately from the waiting period.
Policies can assess incapacity in different ways. What counts as being unable to do your work, and what evidence is needed, should be clear before you rely on the cover. Your occupation, health and the way you earn an income can influence the terms offered. Self-employed people need to understand how their earnings would be assessed for a claim.
Build the plan around what would actually continue during an absence: sick pay, household income, savings and existing insurance. Review it if your work or earnings change. Income protection is not a savings account, and it does not pay simply because work is unavailable. Redundancy or unemployment needs separate consideration unless the policy explicitly includes it.
We’ll discuss your circumstances, existing cover and budget, including the people or commitments you want the insurance to support.
We’ll explain the recommended policy, its premiums, benefits and important limitations, so you can consider what it would and would not cover.
If you choose to proceed, the insurer assesses the application. Check the terms offered and the confirmed start date before relying on cover.
Policies can be available, but the insurer must be able to assess your work and earnings. Accounts or other income evidence may be needed. Fluctuating profit, business expenses and personal drawings are not interchangeable, so check the calculation rather than choosing cover from turnover alone.
Tell your adviser or insurer and review the cover under its terms. A benefit chosen earlier may no longer fit your earnings or needs. Paying for a higher insured amount does not guarantee that the whole amount will be payable if the claim calculation sets a lower limit.
No. Payment Protection Insurance was generally linked to repayments on a particular loan or credit agreement. Income protection is designed to replace part of earnings after a qualifying illness or injury claim, with its own waiting period, benefit limits and policy conditions.
Cover, exclusions and claim conditions vary. Keep up the required premiums to maintain your cover.
