Income Protection.
What is income protection?
An income protection plan is designed to pay out a regular income in the event you are unable to work due to an accident or illness. These types of plans continue to pay out an income as long as you are unable to return to work up until the end date of the policy (typically your normal retirement age).
This type of plan is quite often seen as the foundation of any financial planning as it is likely that other plans will have to be given up if you do not have sufficient income coming into the household.
Who is it for?
This type of plan is designed for anyone whom is working (employed or self employed). It’s worth pointing out that even if your employer provides sick pay, it is unlikely to last for longer than twelve months and so ongoing protection is essential. Plans can be adapted to fit in with any existing protection you might have. As advisers we can help you find the plan that best meets your requirements.
As with all insurance policies, conditions and exclusions will apply.
Another option is Accident, Sickness and Unemployment insurance (ASU)
Accident, sickness and unemployment insurance is a short term income protection policy that replaces your income for up to 12 months, should you be unable to work due to accident, sickness or involuntary redundancy. Unemployment protection insurance can also be brought as a standalone product, as can accident and sickness protection.
Why would I need Accident and Sickness Protection?
It is impossible to predict the future and whilst you may be fit and healthy now, anyone could fall sick and be unable to work. People suffering long term sickness can apply for employment support allowance (ESA) but this may not be enough to maintain their current lifestyle. An accident and sickness protection insurance could give you 12 months of tax free benefits to help you concentrate on getting better.
Why would I need Unemployment Insurance?
In an ideal world, everyone who gets made unemployed would be able to find another job straight away. But according to the Office of National Statistics, more than 800,000 people* in the UK have been out of work, for more than 1 year following redundancy.
Unemployment insurance can be bought as a standalone policy or alongside accident and sickness cover. Unemployment insurance policies will give you the financial support for 12 months to find a new job and get back on your feet. Some unemployment insurance quotes also offer a free back to work service, giving you practical advice tailored to your individual circumstances.
*Information correct as at 16 Oct 2018
