If you have secured or unsecured loan repayments to make each month then you will need to give some thought as to how you can manage to maintain them if you should lose the income you have come to depend upon. What would happen if you lost your job due to involuntary redundancy or due to accident or illness? If you have loan protection insurance behind you there will less of a worry as to where you will get the money needed.

What does loan insurance do?

Loan payment protection insurance - to give it its full name - will supply you with an income that will be payable once you had been unemployed or unable to work for a period of so many days. The income is paid continually while needed for up to a term (typically 12 – 24 months) and then it will cease. The benefits will cease. The terms of a policy can vary considerably so must be checked before taking out the cover.

When can I make a claim on the policy?

Your provider might allow you to put in a claim once you have been unable to work or have been redundant for 30 days. However some providers might ask that you defer from making a claim until the 60 or 90th day of your unemployment or incapacity.
Some providers can also offer to date back your benefit to the first day that you became sick, suffered from an accident or become redundant.

How much benefit will I get back?

The amount of benefit that you will get back from your protection will have been agreed with the provider when the policy was taken out. Typically this will be up to £1,500 or half you gross earned income, whichever is the lesser.
The agreed sum is then paid back to you each month as a tax free benefit.

How long will my benefit last?

Some providers might pay out on the policy for up to a maximum of 12 months if you should have to make a claim for that length of time. Others can offer loan protection insurance that will continue to provide you with an income for as long as the 24th month if it were needed.

Cover that spanned 24 months will cost more than a policy paying out over 12 months which you will have to weigh up against the fact that once the term had been reached the policy will cease regardless of the situation at this time.

Will you be eligible to take out loan insurance?

Before taking out your policy you will have to be sure of being eligible to make a claim on the policy as there will be some exclusions in all loan protection insurance policies. The amount will depend on the provider with some including more than others.
You will, for example, have to be living in the UK, the Channel Isles or the Isle of Man in order to take out cover.

Possible exclusions you can find in your policy

If you are suffering from an ongoing illness then you should check the small print of the cover very carefully. You may find that you will be unable to claim should you become unable to work due to that illness.

You should also check out the wording for those who are self-employed. In the majority of cases a claim can only be made on the policy if you have to stop trading altogether through no fault of your own.

Tailor the cover to suit your needs

You might want protection for redundancy and incapacity in one policy. You will then be able to put in a claim should you become a victim of either of these events.

However if it were to suit your lifestyle better then you can take out protection just for unemployment on its own, for example, if you get a great sick pay plan from your employer.
You can alternatively choose to take out incapacity protection on its own if this type of policy were most suitable.

Other forms of cover you might take

If you want the benefits to replace your lost one so that you will have an income to spend how you wanted, then you may wish to take out income payment protection insurance. This will allow you to meet any essential repayments and outgoings or even just general day to day living costs.

If your mortgage repayments are your biggest worry then you can choose to take out mortgage insurance. Like loan cover, which is debt specific, the policy will provide you with money towards your mortgage repayment which helps you to avoid losing your home by falling into mortgage arrears.

Why you can consider a policy

In the event of becoming unable to work, should you consider applying for an income from the State as a means of maintaining your loan repayments then you need to give thought to the fact that you will have to be eligible to make a claim. The second problem with relying on an a State income is that often the amount that you are entitled to nowhere near matches the one that you were used to bringing home when you were working.
With loan protection you will know for sure how much you will have coming into the home each month and for how long those payments will continue.

How to get the best deal on a policy

Shopping around and comparing the cost of a policy with standalone providers is one of the best ways to make savings on the insurance and to ensure that you get the best deal possible. You can of course take out the cover with an independent provider but by doing so you will usually pay way over the odds for your protection. You can also compare the terms of the loan protection insurance to ensure that you got a policy suitable.
Remember, with loan protection insurance, you can make great savings on your protection; you only have to pay for the events you want to protect against; and, your loan protection insurance can stop debt from building up which can see you being taken to court in the event that you are unable to work or are made unemployed. It really is peace of mind.

Should you become unable to work after suffering from an illness or an accident or if you lost the income you rely on to involuntary unemployment caused by redundancy you would still have to find money from somewhere to continue meeting your essential outgoings. One way of protecting against the unknown is by taking out an income protection insurance Glasgow policy. You could take a policy on the high street or you could choose to search and compare the cost of the policy with independent providers to save on the premiums.

What exactly is income protection insurance?

Income payment protection insurance is a type of protection for your essential outgoings which could be your monthly rent and your utility bills to name just a couple. When taking out a policy you would be able to make a claim once you had been redundant or incapacitated for a period of time which would be dependent on the provider so must be checked at the time of applying for the cover. You would receive a tax free sum of money for up to the term of the policy which again would have to be checked with the provider.

When can I claim on my policy?

With some providers you might be eligible to make a claim on your income protection insurance Glasgow policy after day 30 of continuous involuntary unemployment or incapacity. With other providers you might have to wait for the 60th or even the 90th day to pass before you would see any money come your way.

However 90 days can be a long time to wait before seeing any money as you could have fallen behind on your rent and other essential outgoings by this time. You therefore could want to ensure you could claim from the 30th day and ensure that the policy benefit was dated back to the first day of suffering one of the events you had covered.

How long could I continue claiming?

You might be able to continue claiming on your income for 12 months or your provider could offer protection that would continue for up to the 24th month so always check when comparing the cost of the policy. You might consider the fact that you would pay more if you were to have income cover that could be relied on until the 34th month. Also consider that 12 months could be more time than you would need to recover or find work but that if you should claim up to the term your benefits would cease at this time.

How much income could I claim back from my policy?

When you apply for the quotes for the cover one of the things that is taken into account is the amount of your own income that you choose to protect. The provider would limit this amount so they would need to pre-agree to the amount that you do want to insure. This then becomes your tax free benefit if you were to have to make a claim on your income protection insurance.

This income from your income payment protection insurance policy could be used in any way that you wanted and you could spread it over any essential repayments that came into the home during your period of involuntary unemployment or incapacity for up to as long as the term if needed. You would not have to change your lifestyle or make severe cutbacks which might affect the whole family which would provide peace of mind while you looked for work or concentrated on making your recovery and being able to get back to your own job again.

Tailor the events to suit your circumstances

You might take out your income protection insurance policy to protect against involuntary unemployment and incapacity in the same policy. If you do you could claim if you were to suffer from either of these events. You could also choose what events you wanted to cover. You might just want to protect against redundancy if your employer offered you a good sick pay plan over an extended period of time. You could also just choose to cover against incapacity alone should you believe that you would have enough money to continue maintaining your outgoings if you became redundant.

You could also check the terms of your income protection insurance Glasgow cover to find out if your provider would allow a claim to be made if you should have to stop full time work to take care of a family member as some of the most generous providers would give you this added security of carer cover.

Income protection insurance in Northern Ireland is more commonly referred to as income payment protection as it relates to the payment protection insurance sector. This unique portfolio with three common products offers your best potential for benefits during involuntary redundancy or incapacity for accident or sickness. Some people have never heard of these insurances. Others don’t know what they are or what they do. Many people don’t explore this sector of the insurance industry because they assume they are always going to have work income, or they believe the State will support them if they are out of work. Neither is even close to guaranteed.

Along with income payment protection, loan cover and mortgage payment cover shape the payment protection insurance sector. Each product pays monthly benefits for a specified period of time following an insured event. Income protection insurance in Northern Ireland is commonly used to pay bills and meet other financial needs including groceries. Loan protection allows you to make your monthly credit card and personal loan payments. Mortgage payment cover helps you to manage your ongoing monthly mortgage repayments to help preserve your home while you are missing work.

More about income protection insurance in Northern Ireland

The first thing to figure out as you explore the products in the payment cover sector is whether you are able to collect benefits under the terms and conditions of the typical policy. Generally, you have to be a full time employee for six months to be eligible. Part time employees, retired people, and those that have pre-existing medical conditions are usually excluded from protection.

If you pass the eligibility test, begin to focus on a few key product attributes to find the right policy for your needs. One of the first considerations is the length of the benefit payout period. Some policies pay benefits over a 12 month period, but others pay benefits that run for 24 months.

You also need to know when to expect your first benefit payment. Some policies would provide your first payment at 30 days following the covered event. This is usually what you would want. If you have the flexibility, you might be able to get by with products that don’t pay until 60 or 90 days after the event.

The highest level of cover you can get with most policies is 1500 Pounds or half your regular gross monthly income, whichever is lower. You could take out less protection, but this is not a good move unless you have the financial security from other means.

The events protected by your insurance

Involuntary redundancy and incapacity for accident or sickness are the two common types of events that you can protect under a payment cover policy. Having cover for both gives you the broadest product.

Not everyone wants to pay for benefit for each event type. While it is safer to do so, you might be okay without incapacity cover if your employer offers benefits for accident and illness incapacity. Other people want to have the incapacity protection, but don’t buy redundancy benefits because they are confident in finding new work quickly, and they have some savings.

Carer cover is an extra benefit that some providers include with policies. If you find a good policy that includes this benefit, go for it. This protection pays monthly benefits if you have to leave work to manage the health of a sick or injured family member.

How to get a good deal on income protection insurance in Northern Ireland

To get the best deal on payment cover, you need to know where you can go to buy it. Financial institutions are one option. In fact, these large banks dominated the sector for years by pressuring loan customers into buying their more expensive plans in combination with their loan products. This practice came under ire in a 2005 super complaint by the leading consumer advocate group, Citizen’s Advice. In response to the complaint, the Office of Fair Trading asked the Competition Commission to further explore the sector. It did, and issued several recommendations for improvements. One change was a seven day waiting period placed on the sale of payment protection to new borrowers.

The move freed consumers to explore the marketplace to find the much better deals offered typically by independent insurance specialists. Income protection insurance in Northern Ireland can often be purchased for rates five times less than those offered by financial institutions. Mortgage protection is about four times cheaper. Loan payment cover runs around ten times less expensive.

If you are thinking about Income protection insurance in Manchester, you need to be clear about what you’re looking for. This is because there are two different products with very similar names but which offer quite different levels of cover.

The problem is made worse by the fact that the term Income Protection Insurance is commonly used to describe both types of cover. All references to income protection insurance here though relate to the product that is a member of the Payment Protection Insurance (PPI) family. This offers short to medium term income if you have temporarily lost your income – it does not provide lifetime income assurance for permanent disabilities etc.

Payment protection insurance products provide varying levels of cover should you lose your income as a result of involuntary redundancy or through not being able to work due to illness or accident. The benefits that these products provide can remove some of the worry by giving you some breathing space to help you recuperate or find another job.

The amount you could expect to receive would be around 50 percent of your gross monthly income with a maximum limit of 1500 pounds. This would be paid directly to you as a tax-free sum each month for you to use as you wish.

In common with other types of PPI, the policies for income protection insurance in Manchester are designed to provide cover for relatively short periods of time. Benefits are normally available for periods of up to 12 months although there are a few policies, which have a benefit period of 24 months.

It can take some time from the date you first claim for the benefits to start. This can vary from policy to policy but will typically be anywhere between 4 and 12 weeks. Some providers may backdate payments to the start of the claim period. If you do have to make a claim it may be advisable to inform your insurance provider of your change of circumstances as soon as possible after the event so that they can get the process started. You may also find that you will have to have held the policy for at least six months before you can make a claim.

In addition to income protection insurance in Manchester, there are two other types of PPI, which can ensure that credit repayments continue to be made if income is lost. These are Mortgage Protection Insurance and Loan Protection Insurance. In both these cases the policy will provide for monthly repayments to be made, often directly to the specific lender, so you do not even have to get involved at all.

You can cover yourself for loss of income due to redundancy alone, accident or illness alone or all three. The amount of cover you may find that you need, will depend on your own individual set of personal, financial and career circumstances. For example, if you are in an occupation where there is a generous sick pay scheme then you may not need additional health cover.

To be eligible for income protection insurance in Manchester you would generally have to be in permanent employment, working for at least 16 hours per week. You will probably have to have been employed in that position for at least 6 months or be able to demonstrate a stable work history.

If you are self-employed or work on a contract basis then there may be other conditions which will apply to your particular circumstances. This may also be the case for people in high-risk jobs or who participate in dangerous sporting activities.

As a matter of interest, the other type of income protection insurance policy provides long term cover if you have to give up work for health reasons. It can continue right up to retirement. It only covers health related problems and does not cover redundancy at all. The premiums for this type of cover are understandably much more expensive than those of the short-term version.

It generally always pays to shop around when you are looking to buy something and the same applies if you want to buy income protection insurance in Manchester. There are a number of independent insurance providers operating mainly through the Internet who specialise in Payment Protection Insurance products.

Their policies can be significantly cheaper than similar policies bought from the main High Street lenders, in fact Income protection insurance Manchester bought from one of these specialists can be up to five times cheaper. Nobody likes spending more than they have to, so it may be worth having a look.

Unless you have vast sums of money stashed away, you are probably quite dependent upon your income to live. You may also fret from time to time about how you’d cope if redundancy, sickness or an accident robbed you of that income. If so, you may want to consider income protection insurance in Liverpool as a way of covering some of that risk.

The possibility of losing your income is by no means a theoretical one only. Every month, people are made redundant and often without any warning at all.

Accidents or sickness can also mean that at a stroke you can’t work. It’s possible that your employer has excellent sickness related benefits but if not, your income could quickly disappear.

Having no income will for most people and families prove to be a catastrophe. If you’re reliant on the basic state benefits you may struggle to meet the monthly bills for things such as gas, electricity and food. It may prove impossible to maintain payments on things such as car loans, HP agreements, credit cards and of course the mortgage.

This is where having an income protection insurance in Liverpool policy can step in to help. If you loose your income for reasons beyond your control, these policies will provide you with a monthly income to help you pay your bills and live a relatively normal life while you search for alternative income.

They can pay out up to 50% of your income or 1500 pounds per month whichever is the smaller of the two. This will continue until you find other income up to a maximum of 12 months or perhaps 24 months in the case of some policies.

Income protection insurance in Liverpool is part of a family of products in the insurance industry that are called PPI standing for Payment Protection Insurance. They can, as in this case, generate a monthly income or you can use them to cover just specific outgoing payments you have each month such as the mortgage or car.

It’s worth noting that income protection insurance within the PPI family is intended as a shorter-term policy to cover 12 or perhaps 24 months. There is also a form of Income Protection Insurance that is aimed at providing lifetime protection against a wider variety of risks – this is typically a more expensive and specialised policy.

If you’re looking to protect your lifestyle in the shorter term due to losing your income, then you should keep in mind that these policies are not designed to help you recover from a loss of income you yourself have created. In other words they will not pay out for problems arising from:

• Pregnancy
• Resignations
• Voluntary redundancy
• Some forms of dismissal
• Career breaks / Return to education.

The insurance is open to anyone but there will inevitably be some conditions - including the fact that if you are seen as ‘higher risk’ you may have to pay a little more for your insurance and/or work that bit harder to find it. You may come into this category if:

• You are including sickness cover and you suffer from an existing serious medical condition
• You have an unclear work history or your current employment is unverifiable
• You work in some forms of self-employment
• You work outside of the UK for significant parts of the time
• You work in a highly dangerous occupation.

If you make a claim, the formalities will usually be relatively minor. You may have to show evidence of the reason for your loss of income. During the period of the claim itself, if it’s for unemployment, you will likely be asked to provide periodic proof that you remain unemployed but are actively seeking employment. If the claim covers sickness or accident, you may need to provide regular medical certificates.

You may find that your loan company or companies will try and sell their versions of this insurance. In fact, it may pay you to shop around because the prices of the loan companies are usually several times more expensive than those of the other main sellers – the specialist insurance providers operating on the Internet.

The specialist providers will have a range of policies to suit all needs including income protection insurance in Liverpool. Their prices are typically not only far cheaper than those of the loan companies and banks but in fact will often offer superior cover. Checking them out may be a very profitable use of 5 minutes of your time!

If you have a mortgage, a loan for your car and a credit card or two, should you lose your regular income you may find that these loans become a major and unsupportable burden. This could be where income protection insurance in Wales comes in.

Income protection insurance in Wales will provide you with an alternative income stream if you were to lose your regular income through being made redundant, or being unable to work as a result of an accident or a long-term illness. This income could allow to you pay regular monthly bills and maintain something close to your regular lifestyle.

Income payment protection insurance is one of a group of payment protection insurance products. Other types of payment protection insurance are targeted towards your existing loans. There is one that provides cover for general loan and credit card repayments and a product specifically designed for mortgages. These are known as loan payment insurance and mortgage payment protection insurance. While with income protection insurance in Wales you receive a tax-free sum of money every month, with the loan based products you may find that the insurer will make direct payments to your lender every month.

Payment protection policies are designed to provide short-term relief and their premiums reflect this. Once you make a claim your could generally expect your policy to run for a maximum or 12 months. 24-month cover is available but this is less common and as you would expect, premiums are more expensive.

There are a number of different terms used to describe this type of insurance. You will see it referred to as Income protection, Income protection insurance and income payment protection. These terms are used interchangeably but they all basically refer to one and the same thing.

Confusingly, there is another product which is also known as Income Protection Insurance and which provides cover for long term incapacity only. This type of policy can provide benefit right up to retirement and as you might imagine given the potentially long benefit period, premiums are considerably more expensive.

Payment protection insurance can also be known as ASU cover. ASU stands for Accident, Sickness and Unemployment. You don’t have to insure yourself for all three eventualities and although accident and sickness are generally always covered together under the wider category of incapacity, it is perfectly feasible to insure yourself for unemployment only, accident and sickness only or for all three.

What you may need would depend on your own personal, family and workplace circumstances. If you are lucky enough to be in a job with a generous sick pay scheme for example you may find that redundancy insurance would be sufficient.

To qualify for income protection insurance in Wales you will normally need to have been in permanent employment for at least the past 6 months working for a minimum of 16 hours per week.

In the event that you have to make a claim on you income insurance policy, you could expect to receive around 50 percent of your gross monthly income. Some policies have upper benefit limits around 1500 pounds.

Depending on the type of policy you choose you could have to wait for a period of anything between 30 and 90 days for you policy to start paying out. Policies with longer waiting periods may be slightly cheaper that those with short. Some insurers may want to wait at least 30 days though to be sure that your situation is long term. Some may backdate payments to the start of the claim.

There are many policies, each with its own set of terms and conditions. It may be prudent to take a little time in advance to fully understand how closely your chosen policy meets your requirements. Nobody wants to waste money in buying more insurance than they actually need but buying too little may have unforeseen consequences.

You can buy income insurance from many of the big lenders and high street banks. There are also a number of independent insurance providers that specialise in Payment Protection Insurance. It is generally acknowledged though that the insurance products of the big lenders do tend to be very expensive when compared to an equivalent policy sourced from an independent insurance supplier. In fact cover bought from these independents can be up to five times cheaper than that purchased from the big lenders.

It may pay to avoid rushing your decision about buying income protection in Wales. It’s often a good idea to shop around to ensure that you get the best possible deal for your hard earned money.

People can often feel helpless if they lose their income due to something which was beyond their control, particularly if they have mounting debts and other commitments which will still have to be paid. Trying to recover from a long-term illness or find a new job after redundancy can be difficult enough without balancing the domestic books. But there are some low cost insurance policies which can kick in if somebody loses their income through no fault of their own, effectively replacing a proportion of their wages with an insurance payout on a monthly basis until they are earning again. Income protection insurance in Scotland is part of the payment protection insurance industry, and provides short-term financial support for people who fall on hard times in exchange for premiums.

Paying regular benefits to people who are out of work and wages due to redundancy, illness, or accident and injury, this kind of cover can provide a vital lifeline to those who would otherwise immediately start to struggle after losing their job. Some people might wonder why people go for this kind of deal when there is a state benefit system, sick pay schemes and redundancy packages.

You cannot rely on State assistance

State benefits such as job seeker’s allowance and disability benefits are often completely inadequate when it comes to keeping up with a normal household’s regular outgoings. Typically they won’t be anywhere near enough to cover someone’s combined costs of loan repayments, perhaps a credit card, and other things like rent.

Redundancy packages can be even worse as they may only supply a few days’ worth of pay for people of a certain age who have been in a job for a certain period of time. Sick pay schemes may fare better, but can also run out past the statutory requirements and leave somebody completely high and dry if they are still out of work with the long term ailments.

The main aim of income protection insurance in Scotland is to replace someone’s income, or a proportion of it, until they have found better health and got back into work. Or if they have simply found new work after redundancy. This involves a monthly tax free cash sum paid into someone’s account to be spent just how they wish. Other types of payment protection insurance, such as mortgage or loan cover, are geared towards helping someone with specific debts. Income cover is more flexible in that you can use it for anything you want to, from covering the rent, to meeting utility and credit card bills, or simply paying mobile phone costs and grocery bills.

Waiting periods

As with a lot of income payment deals, income cover does not payout straight away after your claim, but after a kind of holding period has passed. How long this is will often depend on the cost of your premium, as if you want your payments to arrive a month or 30 days after you claim, you could pay more than if you were happy for them to arrive 90 days afterwards.

Income payment protection insurance cover can appeal to people who would have very little or nothing to fall back on in the event they lost their job unexpectedly, through no fault of their own. For example, it might not apply to people who have quite considerable savings set aside that could help them get buy for months or even longer. Likewise, people with considerable other interests such as investments may able to rely on them to cover the basics until they are receiving an income again. But for many other ordinary people, income protection insurance Scotland cover could be one of the most effective ways of ensuring they get help adequately.

There are some conditions placed on this kind of cover when it comes to making a claim. For example, to claim on redundancy you will need to have been made redundant as opposed to have accepted an offer of redundancy. You will also not be able to claim if it can be shown that you were given some kind of notification through an announcement, e-mail or even phone call, for example, that you were going to made redundant before you took out the policy. When it comes to medical conditions, those which are diagnosed before the policy was taken out may not be covered on the illness side of the insurance, meaning you won’t be able to claim normally if you are off work because an old condition you already suffer with has got worse.

But income protection insurance in Scotland has been used by many people who would otherwise have struggled with even the most basic of costs after losing their job. Importantly, a policyholder can normally simply name the amount they would like to receive on a regular basis when setting up a deal. Companies put limits on how much someone can protect, but it is usual to be able to insure at least 50 per cent of your current income.

A job can be one of the first things that people take for granted as it can often seem completely secure. Therefore many people think the income from it is guaranteed, but they can find that a change for the worst in their company’s fortunes or in their own health can put this into question. Some people would immediately start to struggle without their regular income, and may perhaps find the likes of rent, mortgages, and other commitments become almost impossible to keep up with if they lose their income through redundancy or illness. Many people are all too aware of how limited redundancy payouts and the state benefit system can be, but there are some other private financial cover options, including income protection insurance in Leeds, which are available for modest premiums and can provide more viable help.

This kind of cover should not be confused with more long-term deals which only cover against incapacity and supply payouts all the way up to retirement with some deals. Income protection insurance in Leeds as part of the payment protection insurance (PPI) sector is more short-term, providing regular cash handouts to people who lose their income through something which was beyond their control. These payouts come direct from an insurance company straight into someone’s bank account and are tax-free, normally arriving on a monthly basis after someone’s income has been lost.

Some examples of when this kind of cover would kick in includes should somebody be rendered incapacitated by something like a car accident and be off work for such a long period that they are incapacitated past their company sick pay entitlement. In such circumstances a deal like this would kick in and pay the successful claimant the tax-free cash straight into their account to help with some of their essential costs.

Another example would be redundancy, which must be involuntary for somebody to qualify for payouts on a deal like this. Should somebody be let go by their employer they can issue a claim and again get the payouts after their income has dried up. These are the three main types of circumstances covered by income protection insurance in Leeds, and many workers have found the payouts to be a huge benefit and much more effective than state benefits or limited redundancy packages.

As a payment protection insurance product, income cover is just one of a whole range of different policies designed to provide people with short-term cash support with commitments. Some other deals you may or may not have heard often include mortgage protection insurance, which pays out amounts specifically designed to help somebody with their repayments. Loan protection is also another brand of cover, providing help with a specific debt.

Income cover is much broader in that the payments can be spent by the policy holder just how they wish, which means that they could spread them around a wide number of outgoings, including perhaps some of it on a mortgage, some on the phone bill, and some on groceries. How much somebody gets per month is often laid down at the start of the policy, and applicants can often simply name the amount they would like per month after a successful claim. However, this will not be an unlimited amount and will pretty much never be more than your regular income. To give an example an insurance company might say that someone can’t protect more than £1,500 or 50 per cent of their income, whichever amount is smaller.

This is because this form of cover is designed not to replace someone’s income completely but provide a slice of it in the form of regular benefits which may be far more generous than payments from the welfare state. Deals are meant to provide short-term protection but can pay out for as long as 12 months all the way to 24 months on some deals.

Income protection insurance for Leeds consumers can be much better than state benefits if needed and is also not necessarily an expensive luxury. Although it’s possible to buy policies from high street style insurance firms, you can also buy protection from more independent specialist providers as some actually deal specifically in just this type of cover and may be cheaper and even more effective than some of the well-known companies. Once a deal is in place hopefully the policyholder will never have to claim on it, but if they do they are safe in the knowledge there is a regular amount of cash coming in which can provide a firm base for them and which can help to cover the essentials until they are fit and well and back in work again.

Where will you get the income from each month to be able to maintain your essential repayments if you lost your own due to involuntary unemployment or incapacity? You could have to struggle to find the money just to find enough money to continue putting food on the table for your family. You might not have enough money to keep your utility bills up to date. With income protection insurance you will have money coming in each month to fall back onto.

What is income cover?

Income payment protection insurance will provide you with an income once you had been unemployed or incapacitated for a certain amount of time. This amount of time will be dependent on the provider and you will need to check the terms and conditions to find out when and for how long your cover will continue.
With the income behind you, you will be able to concentrate on your search for another job or concentrate on recovering from your incapacity.

When could I put in a claim on the protection?

You will be eligible to put in a claim on the protection once you had been unable to work or had been incapacitated for a period of between 30 and 90 days. Some providers might offer to back date your protection to the first day that you became unemployed or incapacitated so you will have to check the terms offered by the provider you choose before you take out the cover.

How much income will I be able to claim back each month?

The amount of income that you will be entitled to claim back each month will depend on the amount of your monthly income that you chose to protect. This amount is agreed by the provider as all will limit this amount and is then paid back to you over the term if you should have to make your claim for this length of time.
Generally you will be eligible to insure up to £1,500 of your monthly income or half of your gross monthly income whichever was the least amount.

How long will I get payments?

There are some providers that might offer income protection insurance that will provide an income for 12 months and some might offer you a policy that will continue paying out over 24 months in the event of a claim.

Will you be eligible to take cover?

You will have to check to ensure that you were eligible to take out income protection insurance as all providers will include some exclusions in the policy. Some might add in just the most common of exclusions while others could include many more.

With most income cover policies, you will need to be living in the UK, the Channel Isles or the Isle of Man to be eligible to claim. You will also need to work full time and have worked for a period of 6 months at least prior to applying for your income protection insurance.

Other possible exclusions

If you wanted to take out income protection and you were self-employed then you will need to be aware of the conditions that surround self-employment. Generally a policy will only pay out if you had to cease trading on a permanent basis.

Also check the terms very carefully if you suffer from any ongoing illness as if you were to have to take off work due to that illness you might not be eligible to claim on your cover.

The different levels of protection

You can of course take out income protection insurance to insure against the possibility of losing your income through being unable to work and unemployment together. However you could also tailor the policy to suit your needs.

You could just take a policy to protect against unemployment alone or you could choose to take out protection just against the chance of becoming incapacitated.
The events chosen to cover will go towards setting how much you will have to pay for your policy.

Other types of insurance you might consider

If you want protection for your loan repayments then you might want to consider taking out loan payment protection insurance. This policy will provide an income towards you being able to continue meeting your loan demands and can stop you from falling behind into debt with the repayments.

You could consider income payment protection if you want an income that you could use towards meeting any outgoings such as your utility bills, your rent and even your grocery bills.

What are the alternatives to payment protection?

You might try claiming an income from the State if you become unemployed or incapacitated. However often a State income nowhere near matches the income you are used to bringing home so you could still have a struggle to maintain your outgoings. There is often a wait of several weeks before you see any money and by this time you could already be in debt.

Ensuring that you get the best deal on your policy

When you look for income protection insurance with an independent provider then you can be sure that you will get competitive quotes for your income cover. You can shop around with various providers and compare the cost of the insurance and at the same time compare the deal they offer, such as when they pay out and for how long.

With the standalone provider you could choose what events you want protection for and this will help to keep down the cost of the insurance. You will usually not get any of this if you took out cover with the lender on the high street.

A summary of the main benefits

• When taking out your policy you can choose the amount of your income you want to protect. This will be the sum of money that is given back each month in tax free payments.
• You could choose whether you wanted unemployment and incapacity protection together. Just take out a policy for incapacity alone or cover unemployment on its own. This will determine how much you pay for insurance.
• You will know how much money will be coming into the home and from when and how long you will be able to rely on the benefit.
• With income protection insurance behind you there will be money towards your essential bills whatever these were and you could spread it out as you wanted.

Income protection insurance, also known as income payment protection insurance, is one of three payment covers that make up an umbrella of solutions known as payment protection insurance (PPI). Together, these insurance solutions serve as your best opportunity to cover your family’s financial well-being should involuntary redundancy come into your lives. Redundancy, prolonged illness, or accident, are all events that could take you away from work and your income. With a payment cover, you can have a security in place to replace your lost job income should one of these events arise.

Along with income protection insurance, mortgage payment cover and loan payment cover complete the payment protection portfolio. Though they all offer replacement benefits, these payment cover solutions do serve unique purposes. Income protection insurance is a general use benefit to meet your ongoing financial needs when you are displaced. Mortgage cover helps you hold onto your home as you are able to keep up with your monthly mortgage repayments. Loan payment insurance is a product that helps with debt management by enabling you to keep up with monthly personal loan and credit card payments.

Understanding income protection insurance

Payment cover policies include several features that are common amongst most products. Before trying to understand the make up of payment cover policies, you should first think about the eligibility requirements for protection. To be eligible for payment cover, you must be employed full time for a period of six months. Retired people, part time employees, and people with pre-existing medical conditions are not able to collect benefits under the terms of a payment protection solution.

If you are eligible, you should then consider the issues of policies before making a purchase. The first major consideration is the length of the benefits payout period. Some policies pay out for a period of 12 months, while others pay out for a period of 24 months.

The point at which benefits payments begin also varies a bit from one policy to the next. Some deliver the first benefit payment just 30 days after the insured event occurs. Others make the first payment either 60 or 90 days after the covered event. Can you afford to wait two to three months before receiving your first benefits? If you having savings or other funds, perhaps. Otherwise, you might have to restrict your search to those products that pay out after thirty days.

The maximum monthly benefit for an income protection insurance, or other payment cover, is usually 1500 Pounds, or half the normal monthly gross income, whichever is lower. The benefits are tax free so the actual net pay is more significant. Some people try to save on premiums by not getting the most protection. This only makes sense if you can survive on your savings or severance package.

Events covered by income protection insurance

There are a couple different events that you can include in a broad payment cover product. Involuntary redundancy and accident or illness are the typical insured events. While you can get a product that offers benefits for each scenario, you could also elect to just buy protection for one or the other. This only makes sense in certain situations, though.

Some people do not need cover for accidents and illness because they have adequate cover through their employers. Others do need this protection but decide not to buy protection for redundancy. This only is sensible if you are well-skilled and educated to quickly find new work. Also, you must be confident in your savings in order to sustain you while you are out of work.

Carer cover is another benefit that some providers offer free of charge. This benefit is paid when you have to leave work to care for a sick or injured loved one. This is a nice extra protection when you are burdened with trying to balance work and tending to a loved one.

Finding value in income protection insurance

To find value in payment cover, you must consider your options. There are generally two types of providers of payment insurance. One is financial institutions that sell a broad portfolio of financial products, including insurance. Independent insurance specialists focus on insurance solutions and are therefore have more expertise on the payment insurance products.

Unfortunately, for years, many consumers did not realize they had options to buy payment cover. Financial institutions sometimes took advantage of consumers who would by mortgage or loan products. They would often bundle payment protection with loan products using pressurized selling tactics or deception. Financial institutions sell solutions that are much more expensive than independent specialists, but many consumers were not aware of the standalone provider opportunities.

A 2005 Citizen’s Advice super complaint made more people aware of the common practices of bundling insurance and loans, and mis-selling of policies to people ineligible to collect benefits. The Office of Fair Trading (OFT) responded to the complaint by referring the payment sector to the Competition Commission for further review. The review led to several recommendations for fairer selling practices. One of the major resolutions was the placement of a 7 day waiting period during which lenders cannot sell their insurance to new borrowers.

The Financial Services Authority (FSA) was conducting its own investigation of the payment protection sector when the super complaint was filed. In 2007, the FSA fined many leading high street companies it found guilty of mis-selling. This awakened consumers to the challenges that have faced payment protection for years.

With better awareness of the market, you can now take the opportunity to get a better value on income protection insurance and the other payment cover products. Loan payment cover is usually about ten times less expensive when purchased through an independent specialist compare with a financial institution. Mortgage payment insurance is around four times less expensive. Income payment cover is around five times cheaper. These more affordable rates combined with the expertise, service and support that specialists provide make the a much better option to get your best value on a payment cover product.