Millions of British workers are facing redundancy; well-known high street shops and stores are shuttered and boarded, turning many places into ghost-towns; repossessions afflict a decimated housing market; and the situation is likely to get worse before it gets better. With the country’s economy now officially in depression, there is little option for many people but to take cover under income protection insurance.
Confirmation that the economy is in the grip of a depression came in the daily Telegraph newspaper on the 24th of January 2009. It warned that the country was headed for a slump as severe even as that of the Great Depression in the 1930s. Although this is obviously well before the experience of anyone in work at the moment, the effects are already all too plain to see. Once familiar high street shops seem to be closing down left, right and centre, providing just a tip of the iceberg view of waves of redundancy that are affecting every sector of the economy and sending the current jobless total to an estimated 3.4 million before too long (according to another report in the Telegraph, on the 21st of January).
For the individual homeowner, the wider economic woes are brought home to roost by a housing market that has seen prices plummeting, while outstanding mortgage debt remains the same or has actually increased. The combination of lost incomes because of redundancies and ownership of homes which cannot be sold because a sale would realise less than the outstanding mortgage, helps to explain why repossessions are at such a high rate. According to the Telegraph on the 22nd of January, such action by mortgage lenders has nearly doubled in the past year and, according to the Council of Mortgage Lenders, will gather pace during 2009.
Income protection insurance, however, could provide an invaluable lifeline to those facing a loss of their normally earned income from work. Whether the loss is because of absence caused by incapacity (an accident or illness, for example), or because of redundancy, this insurance will pay out a regular, replacement monthly income for as long as it takes for the policy holder to recover and resume normal working, or until he or she is able to secure alternative employment. If it proves impossible to find another job or it takes longer than 12 months to recover from the accident or illness, payments will usually come to an end, although some of the more expensive policy options provide payments for up to a maximum of 24 months.
In either event, of course, income protection insurance thus offers a guaranteed safeguard against a significant impact in terms of the financial cost of redundancy or lost income because of absences from work occasioned by accidents and sickness. It is generally possible, in this way, to cover up to 50% of the policy holder’s normally earned income or £1,500 a month, whichever is less – although policies differ from insurer to insurer, so the particular limits are likely to vary too.
http://www.telegraph.co.uk/finance/financetopics/recession/4326894/Britain-on-the-brink-of-an-economic-depression-say-experts.html
http://www.telegraph.co.uk/finance/financetopics/recession/4315221/Repossessions-double-in-a-year-as-a-family-loses-their-home-every-seven-minutes.html
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