How Much Does an Income Protection Insurance Policy Cost?

If you’ve been looking into income protection, you have probably already been overwhelmed with all the available information. There is so much out there to wade through it can be quite bewildering. The main thing to remember is that not everything you read or hear, is correct or needed, for your circumstances. You should be able to find a product that is best for you and your family, at the best price possible. Here are some tips on how to pick out the best income protection policies for you.

Typically, people tend to claim for more durable items such as long term back pain, long term illness, and major injuries brought on by injury, but also for psychological ailments like cancer, depression and heart attacks. The idea is not to simply protect you from short term discomfort, if you could not work for a longer period of time, at a cheaper rate. While it may feel good to get that money for the short term, it is much better for you to have the security of a longer-term income protection.

One type of income protection cover is sickness pay. This pays out when you become ill, whether you are ill yourself, or because of someone else’s negligence. In order to take out this type of cover you will usually need to show that your illness was not serious enough to result in prolonged hospitalisation, but you will have to prove that you suffered enough pain to prevent work for an extended period of time.

Another example of a good income protection policy is accident benefit. Accident benefit pays out if you or someone else gets injured in an accident. It may seem difficult to think that you could be protected in this way if you are relatively safe from serious injury, but the cost of treating injuries, including rehabilitation, is not something most people can budget. For this reason the protection is best suited to those whose risk of accident is higher than others.

Income protection policies are also very useful when you are experiencing long-term sickness or becoming permanently unable to work. The duration of the illness or disability will determine the level of income protection you can claim. At the very least you will be able to claim a minimum income support payment until you are officially fit again. However, there are some policies that allow you to make more payments into the scheme whilst you are unable to work, which will then boost your entitlements up towards a maximum level.

A suitable income protection scheme for you would depend on your circumstances. For example, you might find that your long-term illness is unlikely to improve your circumstances. Or you could possibly be able to return to work after suffering long-term health problems, but at substantially lower pay-outs. Alternatively, you could suffer long-term inactivity and therefore be unable to work at all. Your insurer would therefore pay a specified amount for as long as you are unable to work.

In addition to being unable to work, you might also be eligible for Income Protection as you pay for similar benefits if you become seriously ill, lose your job or suffer a significant pay rise. If you fall into one of these categories, your insurer will protect your income for a set number of months or, in the case of sickness, for the rest of the working life. This means that you would only receive a payment while you are out of work, or an allowance while you are fully fit and healthy, whichever is the case. If you fall into one of these categories, your insurer would then give you a lump sum payment in the shape of Income Protection on a regular basis.

When you have an income protection insurance policy, it will pay a lump sum if you are unable to work. However, it should be remembered that this is not ‘free cash’. It is simply a way for you to enjoy some security while you are unable to work by receiving some money during your incapacity. It is essential that you take the time to compare your various quotes before deciding which policy best suits your circumstances.