Income Protection insurance is designed to pay you a monthly figure. However, this only happens if you are unable to work due to loss of capacity. So if you are unable to go to work due to an accident or illness, and are unable to earn an income to take care of your bills etc… then you can invoke the benefits of an Income Protection insurance.
During those times, you can claim the monthly payout from your Income Protection insurance, as many times as you need. However, this benefit ceases to exist when you return to work, retire or pass away.
Need for an Income Protection insurance
Many of us have monthly bills and other financial commitments to take care of irrespective the state of our income. This is when Income Protection insurance can be of great help.
If you are in a job that provides you with no sick pay benefit, you must consider an Income Protection insurance plan. At times, despite having 1, 3, 6 or even 12 months sick pay at work, some people still prefer to have an Income Protection insurance too. This turns out to be very useful in cases of long-term incapacity or illness. You never know when you’d break a bone and have your leg in the cast, not being able to go to work for months.
You may still need a couple of months’ rest when your sick pay period is over. This is when Income Protection insurance turns out to be extremely useful. Also, delaying the date of commencement of your claim period will reduce your premiums considerably.
But I get the Statutory Sick Pay (SSP) Benefit
You may get £92.05 per week as your Statutory Sick Pay (SSP) benefit, if you are too ill to work. However, in order to qualify for SSP, you need to be sick and unable to work for at least 4 days in a row (including non-working days).
Also, your employer is obligated to pay it only for up to 28 weeks. Would £92.05 per week cover-up all your bills? Is 28 weeks going to be long enough? It would be unfair to answer these questions because you never know what’s in store for you. So the best solution is to plan ahead and consider an Income Protection insurance plan to safeguard your financial commitments and interests during such phases.
Deadline to the breadline
"Breadine - the poorest condition in which it is acceptable to live"
Average time until Breadline by household type:
Homeowner with no mortgage 426 Days Homeowner with a mortgage 22 Days Privately rented 2 Days Local authority/housing association 0 Days
"Shockingly, as you can see tenants who privately rent or live in council/housing association accommodation have on average between 0-2 days of savings to support themselves putting them on the breadline almost straight away."
Legal & General
"As many as 960,000 employees were on sick leave for a month or more each year on average between October 2010 and September 2013."
Department for Work and Pensions