Long-term income protection is an insurance policy that is designed to cover you if you're unable to work due to injury or illness. It does not cover death which is usually catered for under separate life assurance policies.
Income protection usually pays out until retirement, death or your return to work, although short-term income protection policies are now available at a lower cost. Income protection doesn't pay out if you're made redundant, but will often provide 'back to work' help if you're off sick.
The maximum you can insure is usually around 50-60% of your earnings, as the provider needs to ensure there is an incentive for you to return to work. The good news is that claims are currently tax-free.
It is important to note that income protection policies only pay out once a pre-agreed period has passed (generally from 1 to 12 months after you claim). The longer the delay before you are able to claim, the lower your premiums.
Income protection is not the same as payment protection insurance (PPI)! PPI covers a particular debt and any payouts go to your lender, whereas income protection gives you the tax-free sum if you're unable to work due to illness or injury.
For more information speak to a mortgage protection adviser on 01628 507477 or contact us.
Related articles:
Download our Free First Time Buyers Guide
Recent posts
With the stamp duty relief ending in England and Northern Ireland, we have listed the top 10 cheapest areas for first-time buyers as published by Rightmove.
Are you looking to purchase your first home but unsure where to begin? Here are some tips to get you started.
Choosing which fixed rate to go for has been a dilemma for many of our clients so far this year. There really isn’t a right or wrong answer, but below we will look into the pros and cons of a two-year and five-year to help you make the right decision for you.
Best UK Mortgage Rates this Week
15 days ago
Here are the lowest fixed mortgage rates of the week, available to first-time buyers, home movers, buy-to-let, and those remortgaging.
Call us for more information: 01628 507477 or email: team@mortgagerequired.com.
Stamp Duty Rush as Deadline Looms
16 days ago
According to Rightmove, a whopping 500,000 UK homebuyers are rushing to finalise their home purchase before the new Stamp Duty rules change in April.
The UK government is introducing new rules for Energy Performance Certificates (EPCs) that will impact landlords. Here's a summary of the key changes
Should I buy or rent in 2025?
23 days ago
Choosing to buy a house is one of the biggest decisions you are likely to make in your lifetime. There are many factors that influence a house purchase, these include: finances, housing market conditions, and mortgage rates.
ISAs: what are they, and which one is for me
26 days ago
Since being launched back in 1999 Individual Saving Accounts (ISAs) have been very popular for those wanting to put money into savings. There are four types of ISA, and the majority allow flexible saving and the ability to withdraw funds easily. There are financial penalties on certain products, these usually pay the most interest.
More information
Trusted by
