Income Protection Insurance FAQs
Your income is probably your most important asset. It funds your whole lifestyle from where you live to the food you put on your table. If you have a family, they too are dependent on your income and therefore it is vital to protect it. If you find yourself unable to work due to illness, accident or injury, you must be prepared as to how your lifestyle and expenses will be covered without your income. By taking out an income protection plan you can rest assured knowing that in the case of an unexpected illness or injury, your loss of income won't be a worry. At F.W.E. Crowe Insurance, our qualified financial advisors are ready to help you find a policy that suits your needs at the best possible price. Contact us today to request an income protection insurance quote or receive more information about income protection plans.
What is Income Protection?
Income protection provides you with a pay out if you are unable to work due to illness, accident or injury. It usually pays monthly or in some cases, weekly payments to cover expenses that would generally be covered by your income. Typically, your policy will begin to pay out after you have been able to work for a certain amount of time which will have been agreed when you took the policy out. The majority of policies will continue to make payments to you until you are well enough to return to work, retire, reach the end of your policy term or die. However, this may differ depending on the conditions of your plan so be mindful of all the fine details.
What does Income Protection Insurance Cover?
Income protection covers your loss of earnings in a case of illness, accident or injury preventing you from working. With income protection, you will be able to cover the costs of your daily and monthly outgoings such as bills, childcare and mortgage payments. However, you must be aware that this is not mortgage protection and will not cover your mortgage payments or pay it off in its entirety. The payments you receive from your income protection insurance can be used to pay for whatever expenses you need to cover and mortgage payments may be one of these, but it is recommended that you have an additional policy for mortgage protection insurance in addition to your income insurance. Before you take out your income protection plan, you must choose a waiting period of when your insurer will start to pay out. Waiting periods are typically 4,13, 36 and 52 weeks and the longer the waiting period, the less expensive the insurance will be. In order to assess how long of a waiting period is necessary for you, consider how you would cope financially in a case where you are unable to work. Some employers offer scheme pay outs for a certain amount of time, you might be eligible for government benefits or have personal savings to support yourself. These are all aspects to consider when choosing a waiting period as some of these methods of income can cover you until your protection plan kicks in.
What does Income Protection Insurance Not Cover?
People are often misconstrued to what exactly income protection insurance covers and does not cover. Although you can use your payments to pay the cost of necessary living expenses like bills and even mortgage payments, don't be misled as income protection is not the same as mortgage protection. In order to have your mortgage insured and financially protected, you must take out a mortgage protection insurance plan in addition to your income protection policy. The same applies for the likes of life insurance and critical illness cover.
Am I required to Take Out Income Protection Insurance?
Income protection is highly recommended for those who rely solely on their income to support their lifestyle and living expenses. It is also strongly advised for people with children or dependants as they too would potentially suffer in a case where the income within the household was no longer being earned. If you work for an employer who has an employee benefits package, you may be covered for sick pay for an extended period of time. However, this is not a permanent solution if you were to still be unable to work once your benefits have reached the end of its term. There is also the option of applying for government benefits but this may not be enough to cover all your outgoings and in some cases, support a family. You may choose to live off personal savings but this too is not a long-term plan and may not last. Self-employed individuals are advised to have income protection insurance as they will not have any sort of employment cover and are not entitled to the State Illness Benefit if they are unable to work due to illness.
Why do I Need Income Protection Insurance?
By taking out an income protection insurance plan you will feel at ease knowing that in the case of an unexpected illness or injury that results in not being able to work, your family or dependants or simply just yourself, if you are single, will be protected financially from the burden of monetary stress. Income protection is competitive and the younger you start the less it will cost. Your premiums are eligible for tax relief at your marginal rate of tax.
Get in touch with our helpful team of experts at F.W.E. CROWE INSURANCE to receive the best income protection quotes in the market and find a policy that is perfect for you.