What would happen if illness or injury prevented you from earning? Could you survive on statutory sick pay?
With research from the Mental Health Foundation highlighting that one in three of us regularly worry about being able to pay bills, it’s no surprise these are the kinds of thoughts keeping people awake at night.
The good news is – you don’t have to be one of them.
With income protection insurance, you can put a safety net in place to protect you and your family. Helping you to rest easy, safe in the knowledge that – should you ever be in the unfortunate position of being unable to work – your finances are protected.
Want to find out more? Read on to discover how income protection insurance could help safeguard your future or talk to the team at Rigby Financial today.
What is income protection insurance?
Income protection insurance is a policy designed to pay you a regular monthly income if you’re unable to work due to illness or injury – in simple terms, it helps to replace the loss of your salary.
Payment continues until such time as you are able to return to work – or until you reach retirement age or the end of the policy term.
While the amount you’re paid won’t be like-for-like with your earnings before you had to stop work, it’s usually around 65%. It’s also tax-free and doesn’t affect your right to statutory sick pay or any workplace schemes that are in place, meaning it can go a long way towards cushioning the financial blow if you’re prevented from working for a sustained period.
What does it cover?
If you worry about the ‘what if’s and how you’d maintain your current lifestyle if illness or injury prevented you from going out to work, then income protection insurance is a great idea. But it’s important to understand a few things about it.
Firstly, it’s not unemployment cover. So, if you lose your job and become unemployed, then you won’t be able to claim – although if you become ill or injured during this time (and still have your policy in place) you can still claim.
Factors such as your age, current health, and occupation will all have a bearing on the premium and extent of the cover you receive. As will how long you have to wait before you can claim – the typical time frame is four weeks, but this period can last as long as two years, with policies usually being cheaper the longer you have to wait.
If you have a pre-existing medical condition, some policies may not cover you, while others will.
You also need to be clear on whether you would still be able to claim if you stopped your current role but were able to carry out different duties.
The key point here is that income protection insurance is not a one-size-fits-all policy. There are lots of variations and options out there, making it important to search the market thoroughly to find the right one for you and ensure you have the best possible cover in place.
Need a hand? Talk to one of our financial advisors.
The benefits of income protection insurance
· Financial security
Do you worry about how you would continue to make ends meet if you suddenly fell ill or suffered an injury that meant you could no longer work? Income protection insurance eliminates this worry, giving you complete financial security.
· Peace of mind
Knowing that you, your loved ones, and the lifestyle you enjoy will continue to be provided for with income protection in place can ease anxiety over the unpredictability of what the future may hold.
· Rehabilitation benefits
Not only does income protection insurance massively reduce the impact of losing your monthly salary, but you’ll find many policies offer additional benefits, too. Such as help with rehabilitation – so you can get back to feeling more like your old self as soon as possible.
· Support and counselling
Prolonged periods of absence can make the prospect of returning to work a scary thought. Many policies offer back-to-work support with professional counselling to help you navigate the transition.
· Tax-free
Think income protection sounds good, but worried you’ll get stung for additional tax? Don’t be. Payouts are tax-free – but be aware that they can impact state benefit claims.
Safeguard your future
When it comes to income protection insurance, there’s much to consider. So why not let our experienced financial advisors help?
With a friendly and knowledgeable team on hand and ready to help, we can identify the right policy for your needs. Doing everything in our power to guarantee you sleep soundly – safe in the knowledge that, whatever the future holds, you’re protected.
Call the team now on 01744 886077 or fill in our contact form and we’ll be in touch.