Income Protection Insurance
The life insurance market can be confusing, with so many products to choose from. Your adviser will take the confusion out of income protection insurances and present impartial options, allowing you to easily make sense of what is available.
Income Protection Insurance in Bristol
Income Protection insurance is designed to provide you with an income if you are unable to work because of illness or injury and you meet the provider's definition of incapacity.
You will also receive a benefit if you are diagnosed with a terminal illness during your chosen term. Income protection insurance is also known as permanent health insurance.
You can typically insure around 60% of your income before tax, up to a maximum of £250,000 a year.
You can also decide the amount of time between you becoming incapacitated and getting your first payment, known as the deferred period.
You choose how long you want your payments to last – one year, two years, five years, or to retirement age. You can also have your cover indexed if you wish to protect your benefit's value against the effects of inflation (the rising costs of goods and services over time).
When you take out your plan, you choose how much it goes up, which means your premiums will increase each year. The cost of your plan will depend on the factors listed above, plus things like your age, your medical history, and whether you smoke and your occupation type.
What are the benefits of income protection insurance?
An income protection policy can act as a financial safety net. Regular income from an income protection policy is paid tax-free.
What is the average cost of income protection insurance?
Can you have two income protection policies?
You can have more than one income protection policy, but there is a maximum that you can claim as a percentage of your income. Insurers have a maximum of between 50% and 65% of your earnings.
Several factors influence the cost of income protection insurance, such as age, health, occupation, lifestyle, the waiting period and whether you smoke.
Is income protection worth it?
For those who cannot afford to be off work due to an illness or injury for more than four weeks, income protection insurance could replace up to 60% of your income before tax, helping towards paying your regular costs. It may be that critical illness cover is more appropriate.
Income Protection Insurance Questions
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Just think, your income is used to meet regular costs. These include mortgage repayments, council tax, utilities, home maintenance, servicing your debts, household expenditure (food and drink), regular savings, vehicle or transport costs, socialising, holidays etc.
Further, if you are incapacitated, you may well have to meet additional expenses such as medical bills, purchasing special equipment, adapting your home, travelling to hospital appointments, parking costs and so on. This is where income protection insurance steps in to support you by providing an income when you really need it most.
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Do not worry though, with so much flexibility.
We will recommend an income protection plan that will suit your needs and your budget to give you peace of mind if you need to make a claim.
The cover is also flexible and can adapt as your circumstances change.
When income increases, the policy can be altered to match your needs throughout your life. For example, if you get married or divorced, enter, or dissolve a civil partnership, have or adopt a child, increase your mortgage or get a salary raise, you can usually increase your cover without having to answer any questions about your health.
When we periodically review your mortgage, we will also review your cover to ensure it provides the benefit you need based on your circumstances at that point.