Income protection explained – Rest Less

Many people decide not to take out income protection insurance because they think it’s going to be too expensive, or because they hope they’ll never need to take time off work due to ill health or an accident.

However, according to research by MetLife UK, one in four homeowners have previously suffered an injury or illness, leaving them in financial difficulty which has resulted in them missing a mortgage payment.

A third of respondents said they have had to take four weeks or more off work due to an accident or illness, yet almost half of those with a mortgage (47%) said they currently have no financial protection to cover them in the event they are unable to work due to illness or an accident.

Separate research by LV= found that a third of people have not heard of or are not considering income protection, despite the valuable financial lifeline it could provide if you’re unable to work because you’re unwell or have had an accident.

Of course, if you’re lucky enough to have built up a significant savings pot, then you might decide you don’t need income protection insurance, as you can use your savings to help you make ends meet while you’re off work. Alternatively, your employer might offer generous support if you can work due to an accident or injury, although in most cases this support won’t last long-term.

If you decide to rely on state support, such as Statutory Sick Pay bear in mind that this is unlikely to be enough to cover your mortgage or rent, as well as all your other outgoings.

Before buying income protection insurance, check whether your workplace benefits already include this type of cover, or you may find they entitle you to cheaper rates from protection providers.

Remember too that there are other types of protection available that you might want to consider, including critical illness cover, which will pay out a lump sum in the event you’re diagnosed with one of the serious illnesses specified on the policy. You may also want to think about taking out life insurance, which is designed to pay your loved ones a lump sum when you die. Find out more about life insurance in our article Why life insurance matters.

There are a number of fee-free income protection brokers available in the market, but if you’re looking for somewhere to start, we’ve partnered with Anorak. They can provide you with fee-free advice on buying income protection insurance, quotes from the whole of the market, and help finding the right cover for you.

Author: wpadmin

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