Income Insurance

Income protection insurance is designed to help you financially in the event of a loss of income caused by a long-term illness, injury or unemployment.

It can be used to help cover large monthly outgoings such as mortgage payments, rent payments (if you’re a tenant), utility and council tax bills, or even your grocery shopping costs.

Types of cover

Most income protection providers offer the following three cover options:

Accident and Sickness insurance only – this pays a tax-free monthly income if you are unable to work due to an accident-caused injury or sickness, as certified by a doctor.
Unemployment insurance only* – this provides the same benefit in case of redundancy or other involuntary unemployment. Some policies also cover you in the event that you have to give up work to become a full time carer for a member of your family.
Unemployment, Accident and Sickness insurance combined – this covers both of the above.

The level of cover you opt for, along with other factors such as your age and health, will determine the cost of your insurance.

*Bear in mind that if you take out unemployment cover knowing that you are going to be made redundant, the chances are you won’t receive a payout.

Maximum income benefit

Income protection insurance policies pay out a tax-free income to compensate for any loss of earnings. The maximum amount of benefit you will receive each month is based on a percentage (typically 50%) of your gross monthly earnings.

These monthly payments will continue until you are fit enough to return to work or, if you fail to make a recovery, until the end of the policy term which is typically your selected retirement date.