Every year, close to a million people find themselves unable to work due to injury or illness. Here, Acumen Financial discusses the importance of income protection in unexpected circumstances.
What is income protection?
Income protection is an insurance policy that protects against an inability to work, due to injury or illness. Unlike critical illness cover, this insurance policy works by replacing part of the wage and carries on until the individual is able to work again. The policy allows for reclaims, ensuring full protection at all times.
Why you need income protection
As previously stated, many people find themselves unable to work each year. If this happens to you, it is important to make sure you are fully protected and can do so by selecting the right insurance policy. While some people may not require an insurance policy for the duration of their absence from work, the majority will not receive sufficient sick pay to see them through.
For those who cannot work, and are therefore unable to pay bills, income protection is extremely important. Income protection insurance benefits a wide cross-section of society, particularly those who are self-employed or those who do not receive sick pay from their employer. Income protection can be a vital lifeline which will protect from high levels of debt.
How does income protection work?
Income protection can work in a number of ways and while some policies pay out a set amount of cover to pay bills or outgoings, others will simply cover a percentage of your income. Depending on individual policies, the level of cover will vary.
The three types of cover available include:
- Own occupation: For those who can’t work in their own occupation.
- Suited occupation: For those who can’t do their own job or a similar one that suits qualifications and experience.
- Any occupation: Unable to do any kind of work.
It is important to make sure you select the right level of cover in your insurance policy. Failing to do so may result in the company refusing to pay out due to not meeting the correct terms of the policy.
At Acumen, we have a team of expert financial advisors who can advise on the benefits of income protection insurance. For more information about the types of income protection, contact us today by calling 0800 170 7009 or email [email protected].