Let’s hope not. If you are sure you can go through your working life without ever having an accident or suffering a sickness that would impact your ability to pay the bills, then you don’t need to protect your income. However, we are all aware of members of our family or friends that have been in that position.
For millions of households, this has not been the case and the consequences can be disastrous and take years to recover from.
Unless we have experienced long term illness, there is a tendency to view ourselves as superhuman; and aside from the odd few days off, don’t believe something serious will ever happen whilst we are fit and working. However, it could happen to anyone. For example, none of us plan for accidents but they do happen; usually through no fault of our own. Neither is it the case that the effects of these events are always short-lived.
There are many options which mean it can be tailored to meet your budget or particular needs. For example, the cost will differ on whether you receive the money immediately on claim, or when you have exhausted your savings, or your company sick pay period has finished. You can also choose, with cost implications, how long a plan will pay out for per claim, from an option with no restrictions, to one where it pays for up to one year only.
A claim is dependent upon you being signed off by a medical practitioner for a condition covered under the plan. In the case of most plans, there are no automatic exclusions or restrictions on the cover provided. However, for many of the shorter-term pay-out plans, there are exclusions; and these are usually the types of things people are commonly signed off for: neck/back problems, and/or anxiety/stress/depression.
How can we help?
Our specialists will discuss the cover that is right for you and your family at an affordable rate. For example, many of the plans that pay for up to a year are only fully underwritten at claim stage, whilst the longer term ones are underwritten at the start. This means, for the longer-term ones, that you know exactly what the terms of your plan are before it starts. So, it’s important to make sure that if you’re buying a policy it’s the right one for you.
Five reasons to use us
1. We offer insurance advice with no obligation
2. We will explain the good, the bad, and the ugly
3. We will ask the right questions
4. We do all the work, right through to helping complete the application form
5. We can access a comprehensive range of insurance providers
Accident and Sickness Options
As with all things, the more options you choose the higher the price. Income protection is no different and different insurers load the options differently. It is therefore important to determine what you need and what you would like so we can find the best income protection policy available to you in the market place. Below are some of those options.
This is the period (in weeks or months) following a claim before the benefit you are expecting is paid to you. The longer this period is, the cheaper the premium cost of the plan. It is normally based on what your employer sick pay (if any) is, and how long you can survive financially (i.e any savings you would use).
This can be one year, two years, and five years per claim; or up to your selected retirement age. The shorter the maximum period per claim the cheaper the premium becomes; however, the plan will stop paying if you are still off work after the selected period.
Level or indexed
‘Level’ means that the amount you receive will remain the same throughout the time you have the insurance, regardless of whether your income or expenditure increases. Alternatively, the amount you receive can increase each year in line with inflation, using either the Retail Price Index (RPI) or the Consumer Price Index (CPI).
Guaranteed, reviewable and age-costed
With guaranteed premium policies, the basic premium you pay stays the same throughout the policy term unless you increase the required income amount (or if you have indexation). A plan with reviewable premiums (typically ASU) is reviewed by the provider each year (like home insurance) and a new set of terms are then issued for the next 12 months.
There may be no change. But, the provider can change the premium.
Age-costed premiums, change each year based on your age. These changes are pre-set by the provider and are either ‘set in stone’ or can be reviewed. However, the provider cannot change the terms and conditions of the plan in any way or remove the cover.
Waiver of premium
If ‘waiver of premium’ is selected then, when you begin receiving an income from the insurance policy, the premiums paid will be refunded back to you until the claim finishes.
Most ASU plans do not offer a waiver of premium option, meaning you must pay for the plan whether in claim or not.
“Own” or “Any” occupation
When the ‘Own Occupation’ definition of incapacity is chosen, the policy can pay out for any medical condition that prevents you from working in your own specific job role. When ‘Any’ is used, the insurer will only pay you if you are unable to perform any occupation. ‘Own’ is more expensive than ‘Any’.
Benefits-in-kind / P11D benefits
Some insurers also offer the option of protecting the value of any employment benefits, such as a company car or private health insurance.
Receive a percentage of your income if, on returning to work, the illness or injury you claimed for restricts your duties and you earn less. Some insurers will also pay a top-up should you start a different occupation that pays less.