Why do I need Income Protection Insurance?

Income Protection Insurance pays out if you can no longer work due to illness or injury. Because of this, it can be really useful to have. Very few employers pay for more than a year of sick leave, which could have disastrous financial consequences. However, most Income Protection insurance policies pay out at least 50% of your salary- but often more. So, it is worth taking out a policy for most working adults. We have put together some of the benefits to taking out Income Protection Insurance, so you can decide if it is right for you:

 

Tax Free

First of all, any income you get from your policy will be tax free. As a result, you don’t have to worry about paying a hefty tax bill while you are out of work. So, you can focus on getting back to work with one less financial worry.

 

Help with day to day costs

The money you receive from your policy can be used to pay for anything. Therefore, you can spend it on anything from your mortgage payments to your weekly grocery shop, just as you would with your salary, until you are back at work.

 

Policies to suit you

There’s a huge variety of Income Protection insurance policies available. So, you can customise your policy to your needs. Many policies pay out over a longer term. This means you will be covered until you return to work, or other circumstances such as death. However, there are also shorter term policies available. These will pay out for a shorter, often fixed, term, but the premiums you must pay are also lower!

 

Regular payments

Though there are benefits to a lump sum payment, they do mean that you only receive one payout. In contrast, Income protection insurance will pay out smaller, regular sums. This is more similar to receiving a wage, causing less disruption to your life at an already stressful time.

 

Still recieve benefits

If you are out of work due to illness or injury, you will likely be entitled to some benefit payments. However, they are often not enough to cover everyday costs. Income Protection insurance policies are designed around these, paying out at least half of your salary, while the benefits help with the rest. Thus you can have peace of mind that you won’t be caught out financially in the unfortunate event of being out of work.

 

There are many benefits to taking out an Income Protection Insurance policy. If you think it is something that could benefit you and your family, contact us today for a free, no-obligation quote, or to get some advice on the policies that are available.