What is Income Protection?
Income protection insurance is a policy that gives you peace of mind that protects you against loss of income due to unemployment, illness or accident. It could provide you with a tax-free income and could continue to pay out until you are able to return back to work up to 12 months
When choosing your insurance policy, there are 3 main cover options for you to choose from. They will determine how the policy works, and when it may pay out. You’ll need to choose one from one of the types below or you may decide on a policy combining them:
- Unemployment – losing your job
- Illness – for cover against sickness and being unable to work
- Accident – protection against accidents leaving you unable to work
Our insurance policies are designed to help you pay your bills if any of the above should happen, so that you can maintain your standard of living while you’re not able to work. By paying a monthly premium, if any of those circumstances were to happen, your policy would start that allow you to cover your bills, such as your monthly mortgage or rent, loan/credit card repayments or utility bills.
What are the benefits?
Depending on the income protection policy, there are different benefits available such as:
- Accident insurance – should you be unable to work after having an accident or prolonged illness, the policy could pay up to 65% of your monthly gross income. It is designed to cover your main financial commitments like your mortgage or rent and household bills etc.
- Loan protection – if you’re unable to work because of having an accident, having a prolonged illness or becoming unemployed, this policy could cover your loan repayments and other financial commitments
- Mortgage protection – this policy comes into effect if you’re unable to work due to an accident, sickness or unemployment. At that point, it could pay your mortgage repayments during your absence of work.
- Salary protection – your policy could replace up to 65% of your salary, if you are unable to work due to an illness, accident, or become involuntary unemployed.
- Sickness insurance – a sickness policy could provide you with short-term cover for up to 12 months, while alternatively, a long-term policy could cover you right up until retirement age, this could give you up to 65% of your salary, should you become sick long-term
Long term or short term?
There are two main different types of income protection policy, long-term and short-term.
- Long-term – these policies can give you a tax free regular income until you’re able to go back to work or you retire
- Short-term – typically, these policies will only pay out for up to 12 months
Redundancies, injuries or debilitating illnesses can come out of nowhere. If any of these were to happen, you’d still need to pay your mortgage or rent and bills.
In order for Ascot Finance to find the most suitable policy for you, please fill in your details so we can contact you with the most competitive quotation.