How does income protection work?
Income protection insurance replaces part of your income if you become ill or disabled
Check your workplace benefits
Cost of cover
The cost of your cover will depend on your gender, occupation, age, state of health and whether you smoke. The ‘occupation class’ is used by insurers to decide whether a policyholder can return to work. If a policy will pay out only if a policyholder is unable to work in ‘any occupation’, it might not pay benefits for long – or indeed at all. The most comprehensive definitions are ‘Own Occupation’ or ‘Suited Occupation’. ‘Own Occupation’ means you can make a claim if you are unable to perform your own job; however, being covered under ‘Any Occupation’ means that you have to be unable to perform any job, with equivalent earnings to the job you were doing before not taken into account.
You can also usually choose for your cover to remain the same (level cover) or increase in line with inflation (inflation- linked cover):
Making a claim
Depending on your circumstances, it is possible that the payments from the plan may affect any state benefits due to you. This will depend on your individual situation and what state benefits you are claiming or intending to claim. This market is subject to constant change in terms of the innovative products that are being launched. If you are unsure whether any state benefits you are receiving will be affected, you should seek professional financial advice.