Income Protection
(Cover against losing your earned income because illness or disability stops you working)
If you can’t work your finances are likely to disintegrate rapidly. Whether it’s paying rent or a mortgage, or just meeting the food and general household bills, the State’s support is very low indeed and so we think this is the first cover that every earner should make sure they have.
Income Protection pays you a monthly tax free income for as long as you are unable to work because of illness or disability, no matter how it is caused. It pays out for the life of the policy.
You need to choose how much cover you have. Generally the maximum cover allowed is 50% of your earned income, which is about right as it’s paid tax free, but still leaves you with an incentive to get back to work as soon as possible!
Because the cover would be very expensive if it covered you for colds and flu, you need to choose the gap between the diagnosis of an illness that stops you working and the start of the benefit payment. 3 months is the most commonly chosen, but 6 months makes it a lot cheaper and 1 month more expensive as it is likely to pay out more often. You can check out how the cost changes on our site and work out the best approach for you.
And while it would be best if this policy ran until your retirement date, that might cost too much because the payout could be huge if you have many years to go. That's why we run it to age 50, but you can adjust that.
For our recommendations click Our advice.
For more detailed policy information on all covers please see the key features section of the site and scroll through. Or call our advisory team on 0800 975 1202.
