The cost of income protection UK policies does not have to be exorbitant. Depending on where you shop you can get premiums from as low as £2.51 per £100 of cover. The real question should be can you afford to be without cover.
The policy is designed to provide financial assistance if you were to lose all or part of your income due to involuntary situations such as unforeseen redundancy, sickness or if you had an accident.
All three of these events could lead to financial instability if there are no replacement funds available. If you don’t have any savings, or you can’t rely on family, friends or state handouts then you might want to consider protecting your income.
Please note that we are not referring to the protection product that only covers sickness and accident and which can pay out for years.
In this article we are talking about the shorter term policy which pays a tax free monthly income for 12 or 24 months.
The actual maximum period will depend on the terms of the provider you choose.
Once in receipt of the payment, you can use it to cover any payment or expense you like. The other benefit is that the policy provides peace of mind. You just don’t know what life will throw at you. If you were to fall ill or lose your job, how will you maintain your mortgage or rent payments? If you have loans and credit card bills you could end up with missed mortgage payments and a poor credit profile.
Thankfully with an income protection UK policy in place you won’t have to spend a minute worrying about things like that.
Things To Note
The policy will not pay the equivalent to your salaried income as a benefit. Providers carry maximum benefit levels which restricts the maximum payment to a gross percentage of your salary.
Before you can apply for a policy, you will need to have at least six months employment history. In addition you will need to meet the entry requirements and take note of any exclusion that comes with the policy.
This is a very important step as you need to make sure the policy will cover your circumstances. Take time to read the terms and conditions carefully before you take out the policy.
Providers may not always take the time to explain how the policy works so you need to do a bit of homework also.
We mentioned earlier about the cost of premiums, well generally the independent providers will have lower premiums than their high street counter parts
If you need to make a claim most income protection UK policies will have a 30 – 90 day deferment period.
Summary
So now that you’ve seen the benefits of having an income protection UK policy can you afford to be without one? Due to an ailing economy the risk of redundancy is quite high and while you can’t predict the future you can certainly prepare for it.
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