22 Jan 2019
What you need to know when considering Income Protection
It’s a no brainer to insure your home and your car, even your health. They’re valuable assets that ensure that you are able to maintain your current level of comfort in the world. However, this same mind-set doesn't seem to carry over for most people when it comes to protecting the income that allows you to purchase all those other assets!
Income protection, quite simply, allows you peace of mind. If you fall ill or become injured, you will be able to receive a percentage of your income to help you navigate that difficult time without having the added burden of financial insecurity. The insurance company takes over the role of your employer in the case you become unable to work for reasons within the scope of your policy, paying your income as a PAYE worker. Income protection is a benefit that continues until the end of your working life, making sure that you are protected until you reach retirement.
That said, income protection isn’t right for every situation. In some cases, it may make more sense for you to invest in a savings account, or take a life assurance policy with serious illness cover instead. It’s important to speak to your financial broker to make sure that you are getting the products and level of protection that works best for your individual situation.
Income protection is a great option if:
You may not need Income Protection if:
The cost of an Income protection policy will vary depending on many factors such as:
An added benefit of income protection is the potential tax relief on your premiums. You can get up to a yearly limit of 10% of your total income in tax relief on your income protection premium. This can offset some of the cost of the policy, making it much more affordable. If you have an individual policy, your insurance company will give you a statement showing the premiums paid, which you can claim on your tax return.