Income Protection Insurance – A Wise Move

For those people who work it would be wise to take out some income protection insurance to provide an income when you are unable to work due to illness or injury. The last thing you need to do when you are unwell is worry about finances, adding stress to your condition and possibly impairing your recovery. As with all cover policies the amount you receive and the duration of the contract are dependent upon the amount you have paid for the product and your personal circumstances pertinent to the claim at the time. Whenever things change you must inform your policy provider because if your details do not match exactly the information on your policy your claim may be void and you could receive nothing. Don’t let laziness or an oversight preclude you from receiving what is rightfully yours. Read the small print and keep your provider up to date with any changes that might affect your policy – no matter how small. Change of name perhaps if you have married, change of address, change in salary, change of job or even job description might be pertinent as there are different classes of cover depending upon your occupation to be considered. Make a note in your diary or your calendar to call in quarterly or bi-annually to check if the details they have on record for you are up to date and relevant. You need to maintain you policy not just let it sit in a drawer and gather dust.

Income protection is not life cover – there are no payments on your death so it is probably most suitable for individuals without dependents or a partner who would be left behind if you died having to face the costs of living without your income contributing to the household. When you take out a policy for income protection it will be determined upon the amount of salary you wish to cover, most provide 75% of your salary in the event of you becoming ill or injured and being unable to work as a result of the circumstance. Premiums generally, though not exclusively, take into consideration your age. This is not being age-ist. There are several medical conditions that can affect people because age is one of the contributory factors to the condition. For example, bowel cancer, prostate cancer and diabetes are more likely as you get older as is coronary disease too. Gender is another consideration as despite equality of opportunity there are significant differences, medically, between men and women. Pre-existing conditions and your general health are factors that will be considered and whether you are a smoker or not – smoking is a contributory factor to many conditions that turn into diseases of organs. The type of occupation you hold will be a consideration, whether you do manual work or office work and the risks involved in the type of work you undertake. It is generally accepted that income protection cover will cost approximately the equivalent one week’s salary per year for most policy holders, so having an annual salary of say, £24k would reasonably result in payment of £500 for an income protection policy, which equates to £9.61 per week for peace of mind.

Steven Mcdouglass is an employee of Which Network – A Mortgage Network consultancy company.

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