Income Protection Insurance

Statutory sick pay is currently £109.00 per week. While receiving this amount, you are still expected to continue paying your mortgage, cover your bills, and manage your general expenditure. An income protection policy is designed to replace your income in the event that you are off work and unable to earn for a period of time, providing essential mortgage protection during those challenging moments.

An income protection policy typically offers a payout of up to 65% of your salary, tax-free each month, though you have the option to choose a lower percentage if desired. With comprehensive income protection, this policy can provide monthly payments until a predetermined period is reached. Conversely, a more affordable income protection policy usually has a payout duration of one or two years, which may also be suitable for those needing mortgage protection.

Often, if you are unable to work due to sickness or accident, an income protection policy will provide financial support. Additionally, some income protection policies also offer fracture cover and a death benefit, ensuring comprehensive coverage, which can be essential for those with mortgage protection needs.

An indexed income protection policy will ensure that your cover increases in line with inflation. If you had to claim on an income protection policy in 20 years, your take-home salary would be worth much less. By indexing the policy, it ensures that both your income protection and mortgage protection are future-proofed against inflation rises.

Guaranteed premiums are an option with most providers for an income protection policy. By opting for guaranteed premiums, you ensure that your policy premiums remain fixed until the end of the policy term. It is always more cost-effective to take out a policy when you are young, whether it's for income protection or mortgage protection. Please note that, as with all insurance policies, conditions and exclusions may apply.