Why do I need income protection insurance?

Income protection insurance (also known as salary protection insurance) is designed to pay a tax-free monthly amount to replace some of your loss of earnings when you are unable to work due to an accident or sickness. It can give you a bit of financial protection and it can assist with the costs of essential bills and living expenses. 

If anything were to happen to make you unable to work due to sickness, injury or accident, would you be able to pay off all your regular outgoing like your mortgage, rent or utility bills?

Do I need income protection insurance?

Perhaps you are wondering if it’s worth getting income protection insurance. Well, do you have regular outgoings that need to be paid? If you were unable to work, you may not be able to pay these expenses. By having income protection, you can cover your costs as you will be paid out a percentage of your regular wage. 

How does income protection cover me?

Income protection insurance will help cover you by giving you monthly payments to help pay for all your essential bills if you are unable to work due to medical reasons.

When you apply for income protection there are a couple of options to choose how you plan will pay out. There is a short term (1 to 2 years) ASU cover or long term (until retirement) PHI cover. We recommend that you choose the long term. As you never know how badly an illness could affect you and the duration of time that you would need off work. 

If you were to choose ‘Own Occupation’ incapacity as the definition for your policy, you would get paid out for any medical condition that stops you from doing your job. This could be anything from a bad back to cancer. One of the most claimed medical conditions on income protection is mental health issues such as stress, depression, anxiety, etc. There are other definitions like 'Suited and 'Any Occupation' which may be better for you if you have a risky job role. 

What are the difference between ASU and PHI?

ASU otherwise known as accident, sickness and unemployment insurance is short term insurance. This policy will usually last a maximum of two years. With ASU, you are covered if you have an accident, experience illness or are made redundant or unemployed. During this policy, you would get paid out a percentage of your loss of earnings every month until you are able to go back to work.

PHI otherwise known as permanent health insurance is long term insurance. This policy will last until your predetermined retirement age. You will be paid out monthly with a percentage of your loss of earnings, this happens until you return to work or the end of the policy term. 

Get in touch

We are here to help you get the best income protection policy for you and your circumstances. We can even review any policies you may have to check that you are properly covered. Get in touch by enquiries@covermybubble.co.uk or 01254 460880. 

You can complete our income protection insurance enquiry form here to be provided with a few income protection insurance quotes.