Income protection is your financial security insurance policy that would provide an income if you become a victim of redundancy or incapacity. If you were to suffer from either of these events you still have to maintain your outgoings and repayments each month despite having lost your income. With protection to rely on you would have an income, the amount you chose to protect, each month for the term of the policy if you needed to make a claim that long?

Your chosen amount of your income does have to be agreed by the provider you choose to take out the policy with as this is your tax free income each month. This income would be received with open arms as it could allow you to keep out of debt. There is a period of time that you would need to wait before making a claim and this is dependent on the provider. Some could pay out on your policy once you had been redundant for just 30 days while others could ask that you wait for up to the 90th day before staking a claim. Once the policy had begun to provide your income you would be eligible to a payment each month, if it were needed, for the term. This could be either 12 or 24 months and when the term has been reached the cover would simply cease.

When considering the terms on offer for income protection you should take into account that 90 days can be a long time to wait before seeing any repayments. You could already be in arrears and have fallen behind on your repayments by 3 months. This could add a great deal of stress onto what would already be a very stressful time. You might therefore want to consider taking a policy with a provider that would payout from the 30th day and where your benefit was dated back to the first day that you became redundant. A policy taken out that paid over 24 months would cost more than cover lasting for 12 months and 12 months protection could be more time than you need to have found work.

Income protection can be taken out to suit your lifestyle. You could take out incapacity and redundancy cover together and
make a claim if you were to suffer from either of the events. You could just want to insure against the possibility of redundancy alone if this would suit you better or you might just want to take a policy against incapacity alone. As the events you choose to take cover against would determine how much you pay so this means that you only pay out for cover needed.

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