Would you be able to support your family financially if you suddenly weren’t able to work anymore? No one wants to talk about what could happen in the event you get an illness or suffer an injury that prevents you from working, but it’s critical you have a plan of action. You don’t want to worry about your finances while you’re recovering, you want to focus on getting better!
This does not constitute advice and advice should be sought in all instances before acting on it.
Dealing with a sudden loss of income
If you don’t have a way to earn an income due to illness or injury, how would you handle it? Be prepared for anything that might happen and consider income protection insurance. Income protection is a long-term insurance policy that offers a monthly payment to you when you can’t work. Usually, the policy pays out until you return to work, or until retirement, death, or the end of the policy term — whatever comes first. Don’t get caught out without any protection against a sudden loss of income, make sure you’re covered.
Keeping your finances healthy while you bounce back
Income protection will help you through a tough time, ensuring you can focus on what really matters. As you build your plan against the possibility of losing your income, keep in mind that there is a waiting period before your policy will begin paying out. You should set up your payments to start after your sick pay ends, or if you have any other insurance coverage, wait until they stop covering you. But remember: the more you wait, the less your monthly payment will be. Most illnesses will be covered and you can claim as many times as you need to during the term of the policy.
Especially important for self-employment
It’s crucial for self-employed people to have income protection insurance. When you’re self-employed, if you can’t work, you can’t get paid. Even if you plan for fluctuations in income from month to month, losing your income entirely is a whole different story. If you’re self-employed, you would need an individual policy and you will have to figure out how to prove your income as it is an income-driven insurance policy.
Most people will offer their pre-tax share of the gross profit of the business, after deduction of trading expenses from the last twelve months immediately preceding the injury or illness. You might be asked to provide evidence for up to three years, but most insurance providers understand that income will vary for those who are self-employed.
How much does it cost for coverage?
Like many other insurance policies, the cost of income protection insurance coverage will vary. How much you will pay for your protection policy will depend on your gender, occupation, age, state of health and whether or not you smoke. It will also depend on whether your policy dictates you can return to any occupation or your own occupation specifically.
Here to help
If you want some peace of mind that your family will be provided for financially in case your health sufferers, look no further than income protection insurance. You never know what life will throw at you, so don’t hesitate to reach out to discuss what options are available to help you prepare. Get in contact today.