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Income Protection Insurance – Because Life is Full of Uncertainties.
Life is full of uncertainties, and our ability to earn an income can be unexpectedly disrupted. This is where income protection insurance becomes invaluable. Serving as a crucial safety net, it offers essential financial support during challenging times when you’re unable to work due to illness, injury, or disability. With income protection insurance, you can ensure the continuity of your standard of living and meet your financial commitments even when faced with a loss of income. By providing a reliable source of replacement income, this insurance brings peace of mind, allowing you to focus on your recovery while maintaining stability for yourself and your loved ones.
Why Do I Need Insurance?
Anyone who relies on their income to meet financial obligations and maintain their standard of living should consider purchasing income protection insurance. This includes employees, self-employed individuals, freelancers, and business owners. Additionally, those with financial dependents, such as spouses or children, can greatly benefit from taking out Income Protection. We often insure our phone, pets and vehicles but for some reason, you may not consider insuring yourself. Whether you are employed or self-employed you should consider insuring your income. If you are unable to work due to illness or if you feel that this would affect your ability to pay the bills, then you should consider this essential insurance.
What kind of Income Protection do I need?
In the UK, there are generally two main types of income protection: short-term income protection (STIP) and long-term income protection (LTIP).
Short-Term Income Protection (STIP) provides a temporary source of income replacement for a limited period, typically up to two years. STIP policies are designed to cover short-term illnesses or injuries that prevent you from working. They offer regular payments during the specified benefit period, ensuring you can meet your financial obligations and maintain your standard of living until you recover and return to work.
Long-Term Income Protection (LTIP) offers more comprehensive coverage and is designed to protect your income for an extended duration. These policies provide income replacement for a longer period, which can range from several years to retirement age. LTIP coverage kicks in after a specified waiting period, known as the deferred period, which can vary depending on the policy. This type of insurance offers greater peace of mind and financial stability in case of serious illnesses, accidents, or disabilities that lead to long-term or permanent inability to work.
How much does Income Protection Insurance Cost?
The cost of income protection insurance can vary depending on several factors, including your age, health, occupation, income level, desired coverage amount, policy length, and any additional features you choose to include. Generally, the premium for income protection insurance is calculated as a percentage of your income, typically ranging from 1% to 3% of your gross annual earnings.
To get an accurate cost estimate, get in touch with one of our advisors today. By providing relevant information about your circumstances and desired coverage, we can ensure you receive personalised quotes that reflect your specific situation.
Remember, while the cost of income protection is a factor to consider, it’s crucial to assess the coverage, benefits, and terms of the policy to ensure it aligns with your needs and provides sufficient financial protection in case of income loss due to illness, injury, or disability.
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