What is income protection and why you should consider it?

23/05/2023

Income protection is a type of insurance that provides a regular income if you are unable to work due to illness or injury. It is designed to protect your income and provide financial security during a period of absence from work.

Income protection policies can cover a range of illnesses and injuries, including both physical and mental health conditions. They usually provide a monthly benefit, which is paid out until you can return to work or until the end of the policy term, whichever comes first. The amount of benefit paid out will depend on the level of cover you have chosen and may be based on a percentage of your pre-tax income. Some policies also offer additional benefits, such as rehabilitation support, to help you return to work as soon as possible.

It’s important to note that income protection is different from critical illness cover or life insurance. Critical illness cover provides a lump sum payment if you are diagnosed with a specified critical illness, while life insurance provides a lump sum payment to your beneficiaries in the event of your death.

Why should you consider income protection?

There are several reasons why you might want to consider having income protection. Here are some of the main benefits:

  1. Financial security: If you are unable to work due to illness or injury, income protection can provide you with a regular income to help cover your living expenses. This can provide peace of mind and financial security during a difficult time.
  2. Cover for a wide range of conditions: Income protection can cover a wide range of illnesses and injuries, including both physical and mental health conditions. This means that you are protected against a broad range of potential risks.
  3. Long-term cover: Income protection policies can provide cover for an extended period, often up to several years. This means that you can be confident that you will continue to receive a regular income until you are able to return to work, or until the end of the policy term.
  4. Flexibility: Income protection policies can be tailored to your specific needs and circumstances. You can choose the level of cover that is right for you, and you may be able to adjust your policy over time as your circumstances change.
  5. Tax benefits: In some cases, the premiums you pay for income protection may be tax-deductible, which can help to reduce your overall tax liability.

Overall, income protection can provide valuable financial support during a period of absence from work due to illness or injury.

If you are considering income protection, it’s important to speak to a protection adviser who can help you understand your options and choose the right level of cover for your needs. Book a free initial chat with one of Prydis Wealth’s expert protection advisers by calling 01392 432431, emailing mail@prydis.com or book a call directly with one of our mortgage advisers here.

This article was written by Akmaral Parnell

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