Income Protection
Income protection provides you with an income if you are unable to work due to illness, ensuring that you receive financial support until you are fit to return to your job. This coverage offers you the reassurance that your family’s lifestyle can be sustained even during times of illness when you are unable to earn.
This insurance provides you with a consistent income if you’re unable to work due to illness or an accident, covering up to 65% of your earnings during this time. You can select from either a level or increasing cover, such as inflation-linked options, ensuring you receive a tax-free income until you either return to work, retire, pass away, or reach the end of the policy term, whichever comes first.
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Our services are designed to provide peace of mind and financial security for you and your loved ones.
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We tailor our strategies to meet your unique financial situation and goals.
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Our dedicated team comprises highly skilled professionals with a wealth of experience in financial planning.
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We emphasize innovative strategies designed to enhance your investment performance while effectively reducing the burden of taxes.
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We ensure clear and straightforward communication, keeping you informed every step of the way.
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Ready to secure your financial future and protect your loved ones from unnecessary taxes? Contact Fintegrity IFA for a personalized consultation. Our experts are here to guide you through every step of the process.
The information provided in these FAQs does not constitute professional financial advice. We strongly recommend that you consult a professional adviser before proceeding with a financial transaction.
Is it worth getting income protection?
It depends on whether you currently have income protection and the extent of your coverage; if you are unable to work due to an illness or accident, your employer may provide a certain level of sick pay for a limited duration. However, even when employers offer sick pay, most employees transition to Statutory Sick Pay within six months, and very few employers can support you for more than a year if you are unable to work due to illness. If your income ceases, you could quickly find yourself struggling to pay essential household bills like your mortgage, rent, and utilities. This situation is particularly challenging for self-employed individuals, as there are no sick pay provisions they can rely on.
What does income protection not cover?
Income protection is intended to provide you with a steady income if you are unable to work due to illness or an accident, but it does not offer coverage for job loss or redundancy.
How long does income protection pay out for?
Some policies can provide lower premiums if you choose to restrict the benefit payment duration to two to five years. In contrast, a comprehensive income protection policy will continue to pay out until you are fit to return to work or until your retirement, whichever comes first. If you find yourself unable to perform your previous job due to an illness or accident, a comprehensive policy may also offer supplemental income to help close the gap between your current earnings and your previous salary.
Is income protection better than critical illness insurance?
Critical illness insurance and income protection insurance serve vital but distinct roles in safeguarding your financial well-being and that of your loved ones. Ideally, securing both types of coverage is the best approach, provided it fits within your budget. If cost is a concern, opting for a combination of both, even in smaller amounts, can still offer valuable protection.
Can I have two income protection policies?
The maximum amount you can protect with income protection insurance typically ranges from 50 to 65 percent of your income across all your policies, with the exact limit varying by insurer. If you find yourself insured for more than this upper limit through multiple policies, be aware that your insurer or insurers may restrict the payout you receive in the event of a claim. In cases where your employer’s sick pay policy provides a full salary for a period followed by reduced pay, such as six months at full pay followed by six months at half pay, you might consider utilizing two separate income protection policies. It is advisable for each policy to have a distinct deferred period, ensuring you maintain a consistent income level throughout your time away from work.
What tax do I pay on income protection insurance?
For a personal income protection policy, you cannot deduct premiums from your taxes; however, the benefit payments you receive are completely tax-free. Keep in mind that this tax treatment may vary based on your individual circumstances and could change in the future.
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Ready to secure your financial future and protect your loved ones from unnecessary taxes? Contact Fintegrity IFA for a personalized consultation. Our experts are here to guide you through every step of the process.
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