Income Protection Life Insurance

Income protection insurance will help you cope financially if a life change, such as unemployment, sickness, accident or disability stops you from working.

For the majority of people, personal savings would not be sufficient enough to live off of for any great period of time should the unexpected happen. What’s more, the government can not always be relied on for assistance, as there are strict limits in place as to who qualifies to receive state support. Even if you are eligible, state benefits are unlikely to even come close to paying your monthly outgoings.

Therefore it is advisable to put the necessary safeguards in place, such as income payment protection insurance (IPP). This cover will help you look after your family as well as reduce your monthly commitments to any loans.

As with most types of insurance policy, it is up to the policy holder to choose the level of cover they require. The IPP allows you to insure yourself for mortgage payments / rent, loans, household bills or any other commitments.

The three types of cover available are:

1. 1. Unemployment and incapacity cover
2. 2. Unemployment cover
3. 3. Incapacity cover

   
   

   Typically, income protection insurance pays out for up to one year. The maximum payout is usually £1,000 per month or half your salary – whichever sum is lower.

   
   

   Income payment protection insurance providers will not usually pay out if…
   

   1. …your claim is caused by a pre-existing medical condition
   2. …you suffer from back problems/stress (unless a specialist has confirmed they are serious enough to stop you working)
   3. …you knew you were going to claim before taking out the policy
   4. …you leave work involuntarily
   5. …you leave work because of fraud, misconduct etc.
   6. …you are notified of unemployment within 4 months of the start of the policy