What is income protection?
Income protection is an insurance policy that pays out if you are unable to work due to illness or injury*. The policy gives you peace of mind that you can still afford to pay some or all of your bills instead of relying on savings.
How it works
The amount you receive when you claim is based on a percentage of your earnings. This varies between providers, with the average being between 50%-70%, and reflects that claims are paid tax free. The policy can ensure you continue to receive your regular income until you either retire or are able to return to work. According to ABI, one million workers a year find themselves unable to work due to prolonged illness or injury.
- Income protection is different from critical illness cover, which can pay out one lump sum if you have a specific serious illness.
- You can normally claim as many times as you need to during the duration of your income protection policy.
However, each policy is different, so it is worth discussing with one of our protection advisers before taking any insurance policy out to ensure you are receiving the most suitable cover for your needs.
*Each policy will be subject to its own definitions and eligibility criteria.