Will it pay until I retire?
Income protection offers policy holders a tax free income which can be used to help pay bills, mortgages and even medical costs until you are able to go back to work or until retirement. Policy holders can receive a guaranteed benefit, if they are unable to work due to ill health, until they are able to return back to work in their own role, unlike traditional insurance providers where customers may be forced into an unsuitable job or their provider would not pay a benefit.
Do I have to take employment?
Some prividers offer a recovery benefit of up to £2000 to help get customers back into a job they want. This benefit can be used for things such as physiotherapy, assisted care support, such as making alterations to your car to fit your needs, and education support which helps to re-skill customers so they can get back to work. If you return to work full time then you will be provided with a cash bonus for the first 2 months back at work.
Is the income taxable?
Policy holders can receive a tax free, regular income which is guaranteed when you first take out your cover. Additional benefits such as a waiver of premium are also available whereby all premium payments will be made if customers do become unable to pay due to sickness.
Is the cover index linked?
In order to keep up with inflation both some cover plans are cover index linked. Living costs will increase in line with inflation which may reduce the value of your benefits, with some policies you can automatically choose to have your cover increase each year inline with inflation and the retail price index.
- Help paying the costs of private medical treatments such as specialist doctors or surgery
- Counselling and support groups.
What are the terms of a valid claim?
Some providers will base on claim one of two definitions of incapacity:
Standard definition of incapacity - This will pay out a regular income if you experience a loss in income after becoming unable to work due to an illness or injury that prohibits you from being able to perform the material and substantial duties of your employment and that you are not performing any other occupation for profit.
Special definition of Incapacity - This may apply if a customer’s occupation is of higher risk than normal. Under these circumstances your income protection benefit will pay a regular, tax free income for 12 months if you are totally unable to work due to illness or injury.