We all insure our cars and homes; however, we often forget to protect what pays for it all: our earnings.

Income Protection Insurance is designed to protect up to 70% of your gross (pre-tax) salary in the event of you being rendered unable to work due to an accident or sickness.

Given the level of government support available, and with fewer employers offering long term sick pay above and beyond Statutory Sick Pay, a personal Income Protection policy is more important than ever.

If you suffer from sickness or an injury that prevents you from working your income protection plan will begin to pay a monthly benefit after your chosen deferred period either until the policy ends or you return to work.

You can choose a short term Income Protection plan, which will pay your benefit amount for 1-2 years, or a long term plan which could cover you all the way up to your chosen retirement age. The plan can be arranged to either pay an increasing level of income or to remain level, and arranged with a deferred commencement periods (to make the premiums more affordable).

Example

John, a 44 year old self-employed IT consultant, took out a long term Income Protection plan.  Unfortunately, a year later, John was diagnosed with Multiple Sclerosis and was therefore unable to return to work.

After John’s chosen deferred period of 3 months, his Income Protection policy paid him a monthly tax-free benefit of £1200 each and every month until his chosen retirement age of 65.  He received a total of £158,400 over the term of his policy which ensured he could cover his mortgage payments and other bills.