What does Income Protection Insurance cover?
Income Protection pays a regular monthly sum while you’re unable to work. It would normally kick in as soon after your employer stops paying you sick pay to ensure a cost-effective solution based on your particular needs.
There are different levels of Income Protection that you can opt for. It can be used to replace your full income until you retire or it can be tailored to protect your mortgage and associated costs for a specified period.
You can significantly reduce the cost of this protection by limiting the payout for a maximum of 2 years of a claim. There are a range of additional benefits with this that your mortgage advisor would be happy to discuss with you.
Should I take out Income Protection Insurance?
In the UK, it is estimated that the average family is just 32-days away from the breadline.
23% of families don’t save anything on a monthly basis, so they could be even closer to a financial disaster if income tap was turned off. Even if you do save, the UK average is £321 a month, so it would take over 8 years to save the equivalent of the average UK gross salary of £27,600.
If your income stopped coming in, then it would only be a matter of weeks before your family’s finances started to creak. Income Protection can give you the cover you need at a time when you need it the most.