Archive for the ‘Income Protection Insurance’

Before the taxman takes his slice, a salary can seem quite handsome and comfortable. But once someone has paid their duty and met the cost of a home loan or rent bill, then looked at utility statements, credit card bills, loan commitments, grocery shopping, and fuel costs, some of us can be left with a lot less in the tin than we would like. Savings are a luxury for some people, with many only able to put small amounts aside. All of this means we rely heavily on the regular salary provided by employers and some people can be hit very hard if this is suddenly taken away from them. Therefore some people choose to protect themselves with a product known as income protection insurance.

Quite a few people will not be aware of this product or not fully understand what it does. This is probably because it goes under many different names, which is merely because different insurance companies use different types of jargon and phrases to describe their products. Income protection insurance might also be known as accident sickness unemployment insurance, or ASU, or may come under a broad payment protection insurance term.

All of these things do roughly the same thing - provide replacement cash to help someone keep going and meet financial commitments if they suddenly lose their income unexpectedly. To make a successful claim most insurers require that someone has lost their salary due to suffering an illness, being off work with an injury suffered in an accident, or because they have been made involuntarily redundant.

Most income cover policies pay out a set amount each month following a successful claim. The cash arrives in someone’s bank account in much the same way as their salary would. Although thankfully it is free of tax. Most people need to wait around 30 days before the first payment arrives, although some insurers backdate payments to the first day someone was off work or to the day they claimed.

The amount someone gets each month will vary from one insurer to the other. Most providers sell policies which protect a percentage of someone’s income and normally start at around 50 per cent of what they would get each month if they were still working. Higher amounts can sometimes be agreed in exchange for higher premiums. This will continue for 12 to 24 months, depending on the policy, or until someone is back at work in a job.

There is normally no restriction on what someone spends their money on, although most people choose to spread it around things like rent and mortgage commitments, any loans or other debts, and essentials like fuel and groceries. It can even simply be spent on a new suit for a job interview.

This type of policy is available from a wide variety of firms and some provide better value than others. A good place to start is with the more independent providers such as payment protection specialists British Insurance. The firm’s managing director, Simon Burgess, said: “Income protection insurance can provide vital relief in times of a crisis, replacing a good portion of your income and helping you keep going until you’re back on your feet. Thanks to companies like ours it need not be expensive either.”

Already at nearly 1.8 million by the end of August 2008, the number of people out of work by Christmas is widely predicted to top 2 million, according to a report in the Guardian newspaper on the 15th October 2008. Hot on the heels of this grim news came news from the Independent the following day that prices of the most basic foodstuffs had risen by more than 14% over the past year, while on the 22nd October, the Governor of the Bank of England, Mervyn King confirmed that the British economy is now formally in recession. Little wonder, therefore, that more and more people are looking for income protection insurance .

The reason for their search is simple. The deepening recession puts almost anyone’s job on the line at a time when the basic essentials in life continue to escalate in price. If the worst should happen and redundancy strikes, therefore, it hardly bears thinking about where the money would be found to pay all the domestic bills and keep the household afloat.

And there is more to it than that. Misfortunes come in various shapes and sizes. You could be amongst the lucky ones and hold on to your job. But what if an accident or a persistent illness keeps you off work for more than a month or so? Certainly not every employer can afford to maintain a company sick-pay insurance scheme. Any self-rescue scheme would be entirely down to the individual employee him or herself.

By taking matters into their own hands, it is possible for practically anyone to safeguard their monthly income with income protection insurance. In return for a very modestly-priced premium, this kind of insurance pays out a predetermined monthly benefit, that can be used entirely as a replacement income, in the event of the policy holder being off work because of an accident or ill-health or following compulsory redundancy. The insurance is available to any resident of the UK who is of working age, is currently in employment and has had a regular job for at least the six months immediately prior to commencing the insurance.

The amount of cover is very flexible and will be determined by the policy holder at the outset. This is also the basis, of course, on which the cost of the monthly premiums will be based. The level of replacement income to be provided will also be related to the policy holder’s current income and typically as much as 50% of that income can be covered, or a maximum of £1,000 a month, whichever is less (the precise limits will vary from policy to policy).

A further variation is in the maximum period for which any policy will pay out. Since income protection insurance is designed to cover a reasonably short-term absence from work, payments are generally limited to a maximum of 24 months.

A leading, independent provider of this type of insurance is British Insurance, whose managing director, Simon Burgess, says “with the economic outlook as bleak as it is at present, almost everyone could do with a protected source of income. Certainly, those two million or so who are predicted to be out of work any time soon will have wished they had made the very modest investment in some income protection insurance”.

Careful planning of the household budget is a sensible precaution at any time. During the extraordinary turbulence of the current economic climate, careful marshalling of income and expenditure becomes even more important. Yet there are unexpected events that can upturn even the most carefully laid plans and threatening to throw personal finances into complete disarray. That is when income protection insurance can help you to ride out the storm.

The escalating cost of living is making it increasingly difficult to make ends meet for most households. Rents and mortgage repayments, utility bills and the weekly trip to the supermarket are all increasingly expensive and leave little at the end of the month to put by in the way of savings for a rainy day. Yet that rainy day is just as likely to come around in the form of an accident, an illness or a spell of unemployment that pulls the rug from under the feet of even the best made family budget.

Thankfully, it is still possible to make timely and affordable provision against such unwelcome and unexpected events in a way that continues to deliver a financially lifesaving income whenever it proves impossible to work. This lies in the shape of income protection insurance – or income payment protection insurance, to give it its full title. In return for the payment of a modest monthly premium, income protection insurance then pays out an agreed replacement monthly income if the policy holder is off work recovering from an accident or sickness or has been made compulsorily redundant.

The level of cover provided by income protection insurance is a matter for the policy holder to decide at the outset and will naturally depend on the cost of the premiums that can be afforded. Typically, the maximum amount of cover will be 50% of the policy holder’s normal gross salary (i.e. before deductions) or £1,000, whichever is the lower amount.

Income protection insurance is essentially a short- to medium-tern solution to the loss of a regular income. The replacement income it provides, therefore, is sufficient to see someone through the likely recovery period following an accident or illness or the time it takes to secure alternative employment following an enforced redundancy. Generally, therefore, the insured benefits will be payable for a maximum of 12 months (although more expensive policies are available which extend this period to 24 months). Some policies even make provision for the policy holder choosing to leave work for periods of up to 12 or 24 months in order to become a full-time carer for a dependent or loved one.

Simon Burgess, the managing director of British Insurance, one of the leading independent providers of income protection insurance says: “armed with this kind of highly versatile, yet eminently affordable, insurance, many families have been able to ride out all manner of unexpected financial storms in their lives”.

Although not everyone is always on the so-called breadline, few people are always truly financially comfortable for 365 days a year. This means many of us juggle bills, mortgages and wages quite carefully and often end up quite close to an overdraft facility on some months. Others may be able to say they can put savings aside quite regularly, although they may be quite modest amounts. How many people have therefore thought about what would happen to them if they were suddenly deprived of their income? An illness or accident can mean a long rest and recuperation period, while involuntary redundancy may also lead to a spell on the sidelines long enough to wear down any financial benefit that might be received. Therefore some people might want to consider income protection insurance.

This type of cover has many different names including accident sickness unemployment insurance (ASU) or the broad term payment protection insurance (PPI). Although there are many different names this form of cover will normally do the same thing – ie protect someone’s income should they lose it through no fault of their own.

A typical income protection insurance policy will pay out a sum each month following a successful claim, straight into someone’s bank account, which will be free of tax. An initial period of a month will often have to expire before the first payment, but some policies will backdate their payments to they day of the claim.

How much a policy pays out will be agreed when cover is taken out, but many policies will cover a percentage of a person’s normal, regular income – normally around 50 per cent, although sometimes a higher amount can be agreed. This will continue for around 12 months, although sometimes it will be longer, or until someone gets back to work or finds a new job.

Note there will not normally be any kind of restriction on what the money can be spent on – the policyholder is free to divide it up for mortgage repayments, bills, credit card commitments and other regular costs.

The income protection insurance market has seen accusations that types of cover sold by some well-known firms are overly expensive. However, there are many insurance firms who act as standalone independents and strive to provide better deals. One such company is protection specialist British Insurance. The Firm’s managing director, Simon Burgess, said: “Income protection insurance is a good way of making sure someone’s ability to pay bills and mortgages is covered, even in dire circumstances. Firms like British Insurance also pride themselves on providing a better deal for the customer who likes to shop around.”

Income protection insurance can be taken out to insure against a loss of income, up to a pre-agreed amount, brought about by accident, sickness or unemployment. The sum of money that you received back from the policy would go towards maintaining all of your essential outgoings. The policy could make life a lot easier as it would mean that you would not have to juggle around in order to find enough to pay all your bills.

If you shop around online with independent payment protection providers you can compare the cost of the premiums for income protection insurance. Premiums for the cover will vary as do the conditions under which the policy would payout. One of the cheapest would be from leading payment protection specialist British Insurance. They would offer protection for your income that would come with few exclusions and which has no excess as the benefit would be dated back to day one of you becoming unemployed or from you being incapacitated. You would benefit from the protection from day 30 of unemployment or from being unable to work and it would then continue providing you with an income for up to 12 months. After this time the protection would cease. This would give you time to search for work or to make a recovery without having to worry where you would find all the money needed to service your outgoings.

If you were going to look with other providers then you would need to check their terms and conditions as some providers could payout up to the 24th month. You would also have to check to find out when the protection would begin to payout from as some providers could state up to 90 days before you would be able to put in a claim. You would also have to check the exclusions with all protection to ensure that you would be eligible to make a claim. Once you have then you would have something to fall back on at least for the duration of the policy.

You would be able to use your income protection insurance towards any bills that come into the home. This could be such as putting food on the table and paying the heating and lighting bills, in fact you can use it towards whatever outgoings you have to make to keep life running smoothly and your family happy. Without having something to fall back onto life could become very hard and this could hinder your search for work or making a recovery. It might affect the whole family if you had to make severe cutbacks and have to watch every penny that you spent. Protection is a better safety net than relying on using savings to get you through your unemployment or incapacity as they could run dry well before you had recovered or had found another positions.

Income protection insurance would provide you with a replacement income which would be tax-free if you were to lose your own income as the result of falling sick, suffering from an accident or if you were to become unemployed by such as being made redundant.

You would take out the cover by insuring up to a pre-agreed amount of your income with the provider and this would be the sum of money that would be paid back, tax-free if you had to put in a claim. The sum of money that you would receive through the policy would go a long way towards you being able to keep up with your essential outgoings. You would be able to use the money towards any bills that would come into the home which could be anything from keeping food on the table to paying the utility bills.

Without something to fall back on if you lost your income, life could become very hard indeed for the entire family if you have to make cutbacks. You could also get into debt if you put off payments with the hope of catching up on them in the future. With income cover behind you the sum of money it paid would go a long way towards providing peace of mind which would allow you to concentrate on making a recovery or in the case of unemployment time to look around for work.

If you choose to take out protection with independent payment protection specialist British Insurance you would be able to make a claim from the 30th day of becoming unemployed or from being incapacitated. British Insurance would also back date the benefit to day one of your unemployment or from you being unable to work. You would then receive an income each month for up to a maximum of 12 months and then the cover would expire.

If you chose to look around for income protection insurance with other providers you would have to check out the terms and conditions to find out when the protection would payout. Some providers could payout for up to 24 months on the protection before the policy ends. You also need to check to see when the protection would begin to payout as some providers could state that you would have to be unemployed or incapacitated for a period of at least 90 days before claiming. You also need to check out the exclusions that providers put into the protection. Some providers might add in many while others would add in just the most frequently found exclusions.

As you rely on your income a great deal to see you through all the bills that need paying each and every month if you were to suddenly lose that income life would be extremely hard to deal with. If you became a victim of unemployment caused by redundancy or could not work after suffering an illness or an accident, you would have to find the money from somewhere to be continue paying your essential outgoings. With income protection insurance to fall back on none of this would be a problem as you would receive an income.

You can take out income protection insurance with a standalone ethical payment protection provider such as British Insurance. They allow you to take out insurance for up to a certain amount of your monthly income which would be agreed upon when you take out the policy. If and when you had to make a claim on the insurance you would receive this sum back, tax-free which would go a great way towards you being able to continue meeting all your essential outgoings. These could be anything and everything that would need to be paid each month from paying food bills in the super market to paying for heating and lighting.

Without something to fall back on you could have to make many changes and cutbacks in order to be able to pay the essential outgoings that come into the home. You might even have to juggle bills around and hope that some time in the future you catch up on them and put things right. All of this could be avoided if you choose to get a quote for protection from an independent payment protection specialist. One such provider is British Insurance and they offer one of the cheapest quotes for a quality product along with providing you with all the information you need to ensure suitability.

British Insurance would begin paying back on income protection insurance when you have reached the 30th day of your unemployment or incapacity. They would also back pay on the protection to day of you being made redundant or from you being unable to work and would then continue paying your income each month for as long as the 12th month. You would need to find out when the protection would begin to payout and when it would end if you chose to take out cover with other providers as some would state at least 90 days before claiming. While some providers will extend the date for the cover starting some will also extend how long the protection would supply you with an income. With some providers you could receive payout for 24 months.

A sudden loss of income would have just struggling to find the money to be able to continue paying your essential outgoings each month. If you cannot find the money to keep up with the bills to keep the home running then not only you would be affected but also your whole family. If you want peace of mind that you would have the money to be able to pay then you need to consider taking out income protection insurance. You might lose your own income if you become unemployed or suffer an accident or illness and with protection you would be covered against all of these.

Income protection insurance – or income payment protection insurance to give it its full title - would be taken by the policyholder insuring a pre-agreed amount of their income and then this sum would be claimed back if and when you would need to put in a claim. The income would be tax-free and would go a long way towards you being able to maintain the payments that came into the home on a monthly basis. You could use the money towards whatever bills you like which would mean that you would not have to struggle to keep up.

Without an income each month you could be left having to juggle bills around with the hope of being able to catch up in the future. You could have to turn to any savings and these might not be sufficient to maintain your outgoings until you found work or made a recovery. You could apply for help from the State, however you would have to be eligible and the income you received might not be anywhere near enough for you to be able to meet all your essential outgoings.

Income protection insurance for a monthly premium when taken out with standalone specialists British Insurance would provide you with a replacement income each month for up to 12 months. They would backdate the protection to day one of you losing your income due to accident, sickness or unemployment after putting in your claim after 30 days. There are some providers that might ask that you wait for up to 90 days before you would be able to put in a claim and some might offer protection that ran for up to 24 months.  A policy can be a safety net against the unknown but you would have to check the terms and conditions for the exclusions. The exclusions would have to match against your circumstances before you took out the cover because they could mean you would be ineligible to make a claim.

Income protection insurance should be considered by anyone who is the main earner in the family in case you lose your income. You could lose your income as a result of unemployment by such as being made redundant or you could become ill or suffer an accident that meant you might be unable to work for many months. Without an income coming into the home you could be struggling to continue meeting your essential outgoings. With the protection you would have the financial safety net of monthly tax free income and could concentrate of being able to get back to work or find another job.

Income payment protection insurance – to give income protection insurance its full name -is different from a similar named policy called income protection. Income protection pays out differently to income payment protection. It would payout over a much longer term which is as long as your retirement age if necessary. However unemployment is not covered but it would protect against accident and sickness.

Income payment protection, which is the type of payment protection we are discussing, would pay out in the shorter term. Providers usually sell protection that begins between 30 days and the 90th of either unemployment or incapacity. Once the provider has begun to payout on the policy they would continue to do so for either 12 or 24 months. Ethical payment protection specialist British Insurance would provide you with 12 months of protection after 30 days.

You are able to take protection with British Insurance based on age and the amount of your income that you want to insure. All providers will set a limit of the amount of your monthly income that you can take protection for. This should provide you with enough money so that you can keep on top of your essential outgoings. Having to struggle to find the money would only add more stress onto an already stressful situation. With the policy you would not have to worry.

Income protection insurance from British Insurance is accessible to all for far cheaper than you would be able to take out protection for with the high street lender. As they offer a policy for premiums which are based on your age this means that the younger generation can now afford to protect their income. Premiums do not go up with age so the premium you are quoted on their website is the price that you will always pay unless you cancel the policy. It is a far better safety net than relying on State benefits or savings. You would have to eligible to claim State benefit and it often fails to provide enough for you to pay all your outgoings each month.

Income protection insurance could be your lifeline if you were to suddenly find yourself without an income. It can be taken to protect against the financial ramifications of unemployment which is not your own fault such as redundancy and it also offers cover against accident and sickness.

Income payment protection would provide you with an income after the 30th day of you becoming incapacitated or unemployed with a policy from independent provider British Insurance and would then pay out continually each month up for twelve months – or, if you return to work within this period.

As with all insurances, the terms and conditions of the policy will vary among the different providers. Do always make sure you fully understand the cover you are buying. For example, some providers could offer 24 months cover and others might ask 90 days before you can make a claim. Check out policies on a like for like basis as some offer additional benefits. For example, British Insurance backdate their policy to the first day of you falling sick; suffering an accident or losing your job to redundancy.

Income protection insurance cover can be used for whatever purpose you wish - its aim is to give you an income. You may wish to use it for putting towards your mortgage repayments for example and this could allow you to pay your mortgage each month. As this is the first thing that needs to be kept on top of then cover, whether as an income payment protection insurance or the more specific mortgage payment protection insurance, is essential. Missed mortgage payments and mortgage arrears could lead to repossession of your home by the lender.

Being able to maintain the repayments of credit cards or loans is also essential. Falling into debt would affect your credit rating and this means that when you apply for credit in the future you could be turned down. It also means that if the loan is secured on your home you might lose your home and you could also be taken to court for unsecured loan debt and have bailiffs come to take your possessions.

Of course income protection insurance would also allow the peace of mind of paying all essential outgoings that come into the home each month. You would not have to struggle to find the money to pay heating, lighting and food bills or make changes to your lifestyle.