Income Protection, often referred to as Permanent Health Insurance, is designed to provide a monthly income if you are unable to work for medical reasons. It is often a long-term income protection policy designed to replace a proportion (usually up to 65%) of your income in the event that you are unable to work, and no longer receiving income.
A deferred period (or waiting period) can be selected so that payments are received at the appropriate time, for example, to tie in with when your employer stops providing sick pay. The longer the deferred period, the cheaper the monthly premium will become.
The monthly benefit can be a Level amount, or index linked (to maintain buying power against the effects of inflation over time) and would continue until you either returned to work, died, or the policy reached the end of its term.
These monthly payments will help you to meet your long-term mortgage payments, associated insurances, and living expenses, to help ensure that you don’t fall behind with your monthly commitments.
Top tip: It is possible to select a ‘Limited Benefit’ period for these types of policies, which will reduce the amount of time the benefit will be paid in the event of a claim, typically to anything between 1 and 5 years. This will reduce the monthly premium to a more affordable level if you have a lower budget!
As always, we will be happy to advise on what is the most appropriate cover for your needs, so please call one of our Protection Advisers on 01271 346123 for more information.
This Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against the loss of income. For impartial information about insurance, please visit the website at www.moneyadviceservice.org.uk