Income protection which

The longer you wait, the lower the monthly premiums. We can help you start sorting out your financial problems. Find free, confidential advice now using our free Debt Advice Locator Tool.

Income protection policies cover a wide range of illnesses, conditions and situations. Premiums can vary and different insurers can use very different criteria. The best way to make sure you get what you need is to get advice from an independent financial adviser or specialist broker.

They can take you through the details of the various policies available, and make sure you choose the right one. They might charge a fee for their services, or they might be paid in commission by insurance companies. There are also specialist brokers and insurers for people who have been declined insurance.

When you make a claim, the insurer will check your medical history. Take your time reading and completing the application.

Circumstances can change over time, so review your policy regularly to make sure that it would still cover what you need. You might need to increase it. For example, if you have a child or take out a new mortgage you might need more cover than your policy currently provides. Or if you get a new job that comes with more generous sick pay, you might be able to decrease your level of cover. Join our private Debt Support Community Facebook group to help give you new ideas to tackle debts and keep you motivated.

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You can use a comparison website to do this. You probably won't be able to buy the insurance online as you will need to be assessed by the company for your suitability. But you will be able to apply for a quote online or find details of insurance advisers you can speak to. If you take out income protection insurance, you usually have 30 days to cancel the policy and get a full refund. If you decide to cancel the policy after 30 days, the money you are refunded may be less than the amount you have put in.

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England This advice applies to England: England home Advice can vary depending on where you live. Income protection insurance This advice applies to England Print. What you need to think about before you take out income protection insurance Before you think about taking out income protection insurance, ask yourself the following questions: Do I really need income protection insurance?

Check: that you don't already get income protection insurance through work. Some employers offer this as a benefit. Your employment contract, handbook or personnel department will have details if this is the case whether you have some other kind of illness insurance combined with another insurance policy or with your mortgage which covers you for serious illness whether you have savings you can use instead of insurance.

However, you need to think very carefully about whether you want to rely on savings. You may not be able to save enough to cover a long period of ill-health. And you may face another emergency, which would use up your savings and leave you with no cover for illness. Is this the best type of illness insurance for me? Do you have enough money to pay for illness insurance?

What you need to know before you take out income protection insurance You should always check the terms and conditions of any insurance policy very carefully before you sign up to make sure it meets all your needs.

Policyholders are covered until retirement or their return to work, depending on the policy taken out. This is to incentivise you to return to work if you can. Find out more: Do I need life insurance? This simply means the potential payout increases each year, to take into account higher standards of living and a higher salary as time goes on. Most providers increase the potential payout in line with the retail price index RPI measure of inflation, or by a fixed percentage each year. The cost of an index-linked policy is higher to start with when compared to a non-indexed policy and will increase each year.

Find out more: Insurance for self-employed workers. For example, your company may offer to pay your salary for three months in the event of illness or injury. Permanent health insurance This is the technical name for income protection insurance, often used by insurers. It covers all forms of long-term income protection insurance. Accident and sickness cover This provides a replacement monthly income if you have to stop work due to injury or for health reasons.

It can be taken out as a long-term or short-term policy. Unemployment cover This protects against potential redundancy , paying an income for the time you are out of work. It is only available as a short-term policy, typically up to 12 months. Accident, sickness and unemployment This is a combination of the above, covering all scenarios why you might be out of work. Policies are short-term and tend to pay out for up to two years. The main difference is that PHI protects against long-term sickness or injury only, and will pay out until you retire.

ASU tends to be taken out on a short-term basis, providing payments for up to two years, and it includes redundancy provisions.

Typically, you can make as many claims as required on a long-term PHI policy as long as they are legitimate. ASU policies only allow a single claim. The policy is cancelled after you claim. You will then have to take out a new one if you want to be covered again. In short, no. Payment protection insurance PPI typically covers loan repayments for example, a mortgage , whereas income protection insurance funds broader living costs. While the payout from an income protection policy can be used to cover mortgage repayments, it can also pay for food, bills and any other household expenses.

PPI policies also tend to be short-term, up to 24 months, whereas income protection can pay out for a much longer time. Find out more: How critical illness insurance works. You can find out more about the differences in this article.

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