Income Protection

Income protection is the one protection product everyone with an income should have, particularly if you’re self employed and wear a toolbelt!

Once known as permanent health insurance (PHI), income protection is an insurance policy that pays out if you’re unable to work because of injury or illness, we’re talking anything that stops you working so it won’t surprise you to hear that a huge portion of claims are for things like back pain and stress. It’s kind of like a personal sick pay plan that kicks in when your sick pay at work is exhausted, if you’re self employed you can have it kick in from as little as a week or as long as 24 months.

Income protection usually pays out until retirement, death or your return to work, although short-term income protection policies, which last for one, two or five years, are also available at a lower cost.

It’s important not to confuse income protection with the now shunned payment protection insurance, (PPI) where PPI covers a particular debt with payments made directly to the lender, income protection gives you a tax-free proportion of your income if you’re unable to work because of illness or injury.

When you are working, you’d hope that you would be getting an increase in your salary to ensure that your pay keeps up with the rising cost of living. At Advantage we make sure that the cover we arrange for you remains suitable for as long as possible and will therefore talk to you about the benefits of ‘index-linking’ your Income Protection. This essentially means the amount you receive from your policy will remain relevant as the years go by.

There are loads of moving parts to an Income Protection policy making advice absolutely essential if you’re considering protecting your ability to earn money. Call us today or make an appointment using our appointment tool. We’ll quickly be able to give you an idea of the cost of this amazing cover.

It’s hard for us to give a typical cost of income protection because there are simply so many variables to consider. One advantage to having so many variables is that we can really work to any budget, having some cover is better than none at all, you’ll be pleasantly surprised to hear about how much cover you could obtain for something like £15 per month.

If you’re employed there’s statutory sick pay, or SSP, is the minimum you must legally be paid if you’re off sick from work. It is paid to employees of companies, who are off sick for at least four days in a row. 

While you’re on sick leave, the standard weekly rate for SSP is £94.25 a week. (in 2020) How far would that go? Just £408 per month. Statutory sick pay can be paid for up to 28 weeks. It’s paid by your employer but, if your employer goes bust, HMRC will pay your SSP instead. The benefits system in the UK has recently changed, and income-related ESA has been replaced by Universal Credit.

Ever thought about your most valuable asset? House, Car, jewellery perhaps? Nope. Your most valuable asset is your ability to make money, think about how much you’ll earn over your career. Worth protecting right? Yet we’re more likely to protect our mobile phone than our income. Give us a call to discuss the Income Protection options availble to you today. 

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