Income Protection

Category: Blog

We often insure things like …

  • Mobile phones
  • Pets
  • Holidays
  • Car & Home

But not the income that pays for it all!

What is Income Protection

Income protection pays a monthly sum if you are unable to work due to an illness or injury, resulting in a loss of earnings.
The payments are designed to replace income, and pay for mortgage or rent, food, day to day costs and household bills etc.
It is paid until you recover and return to work, die or the benefit period ends.

How far would you get on £96.35?

If you became too ill to work

You might be surprised to find that Statutory Sick Pay is only £96.351 a week. Enough to fill up the car maybe, but how far through the week would you get?

What might the state provide?

  • If you are employed, you may be eligible for Statutory Sick Pay (SSP) which is just £96.351 a week and is only paid for up to 28 weeks – although your employer may pay you more than this.
  • If you are self-employed, you are not eligible for SSP, but may be eligible for Employment and Support Allowance (ESA) which is only £74.701 a week

Neither are a lot of money when you consider the average household family spend on food alone is £63.702 a week.

Some employers will pay full pay for a short period e.g., 1-3 months, but the average duration of an income protection claim is 6 years 11 months3.

A common misconception is that these policies do not “pay-out”, however a leading providers’ statistic showed 93%4 of income protection claims were paid-out in 2020.

Whether you are renting or a homeowner, income protection insurance can be flexible and affordable to match your needs. Talk to us about how we can help.

Sources: 1 www.gov.uk, November 2021. 2 www.ons.gov.uk, March 2021. Please note that state benefits are changing, depending on where you live in the UK you may be entitled to different benefits – visit www.gov.uk for more information. 3 Aviva Individual protection claims report 2021. 4 L&G Claims 2020.

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