Income protection is one of the most important types of insurance cover available. Policies pay out a monthly benefit to cover lost earnings if you find yourself unable to work due to illness or injury, and some short-term plans provide redundancy cover too. Short-term policies generally provide cover for, say, up to two years, while long-term policies can protect your earnings for much longer.
A short-term policy can cover major bills such as mortgage payments. Long-term policies will usually provide a regular income until you are well enough to return to work, or until the end of the policy term. Short-term income protection can be a good choice if you’re not entitled to benefits as part of your employment contract, or prefer lower monthly payments in exchange for a shorter period of insurance. Benefits can often be paid out within a few weeks of the start of the illness or disability.
Long-term income protection will obviously provide cover for a longer period off work, and that can be up to retirement or until the policy term ends. Long-term policies tend to have a longer ‘deferred period’, that’s the waiting time before the policy will pay out, and can be between three and six months. They tend to suit those with sufficient savings to tide them over for a few months, and who can afford higher premiums for long-term benefits. If you’d like advice, get in touch.
As with all insurance policies, conditions and exclusions will apply.