• Everything is paid from your income

    Make sure it’s protected to cover everything

  • It can happen to anyone

    41% of income protection claims are accident related

    Exeter Family Friendly Claims Stats

  • It’s one of the biggest reasons people lose their homes

    131 million days were lost due to sickness absences in the UK in 2013

    http://www.ons.gov.uk/ons/rel/lmac/sickness-absence-in-the-labour-market/2014/sty-sickness-absence.html

  • 1,589 are made redundant daily

    In this current climate, make sure you are covered, should the worst happen

    Creditaction.org

  • How long does your sick pay at work last?

    The average long term sick claim is for 7 years

    LV claims stats

Income Protection

What is it?

Income Protection is a name given to several products, accident and sickness cover, permanent health insurance and redundancy plans.  The aim of these policies is to provide an income to you should you stop getting paid.  It can cover everything from a cold or a broken arm, to more serious conditions like a heart attack and cancer.  The plans normally tops up any work benefits you may have. 

There are a number of choices you have to make when taking out income protection insurance.  The key part of income protection is to ensure you are covered for your ‘Own Occupation’.  This means whatever prevents you from doing your own job the policy pays out.  If you take out a cheaper work or suited occupation policy, you may find yourself in a unique situation where you are too sick to work but not sick enough to claim.  

The amount of income protection you need is also a personal choice.  Many people take out between 50-65% of their annual salary.  By law, you are entitled to 28 weeks statutory sick pay at £88.45 a week (1).  In many cases however, this would not be enough to live on.

1. https://www.gov.uk/statutory-sick-pay/overview

An income protection plan allows you to choose a deferred period. A deferred is the time period that you have to wait until you receive the money, when you make a claim. If you are lucky enough to get sick pay, then to save money you could have a longer deferred period to match your sick pay with work, typically 13 weeks, 6 months or even a year.  However if you have none or are self-employed, the deferred period can be straight away, a week or if you have savings, several months.

You cannot make a claim on Income Protection while you are still getting sick pay from your employer. Please be aware that you cannot be in a better financial situation claiming on an insurance plan than by working. 

The biggest factor on the price you pay for income protection is the job you do.  An office worker would typically pay less for a policy than a builder, even if they are the same age, have the same sum assured and the same deferred period.  The reason for this is a builder is considered to be a higher risk occupation than an office worker. 

Here are a few statistics that might surprise you!

A Nurse is considered a higher risk occupation than a Doctor.  This is due to Nurses having to lift patients and therefore bad backs are claimed on.  A Teacher is one of the most “claimed on” jobs according to income protection.  More Teachers claim for stress than anything else.  62% of claims for income protection are for bad backs and injuries such as broken bones and whiplash.  These can happen to anyone.

Contrary to common belief, if you are self-employed you are able to take out these plans.  

Speak to a Proadvice adviser to find out which plan is most suitable for you

Do I need it?

Let us imagine that you own a machine that pays £2,000 at the end of each month.  Every month, £2,000 cash is printed out.  It is the greatest invention ever but there is only one; if it breaks, that is it. No more money. 

You can spend that money on anything you like; you can buy a house, go on holiday, buy food and pay your bills.

Now, how much would you pay to insure that machine?  It is your only source of income.  If the machine breaks down you stop getting the £2,000 pounds. You won't be able to pay for the mortgage, unable go on holidays and you wont be able to pay your bills.

Would you pay to insure the machine?  If you answered yes, then you need income protection.  You would probably have guessed you are that money machine. 

How does it work?

If something happened to you that stopped you working then the income protection plan would pay out.  Proadvice will help you decide which policy is most suited to you taking into consideration a number of key points.

The most important of these is ensuring you get Own Occupation rather than suited or work tasks.  Many people take out income protection believing they are covered. However, when it comes to claiming, they find out they have the wrong classification which will stop a pay-out.  Our advisers will also be able to discuss with you the other choices such as short term, long term, deferred period and unemployment option.  Ensuring that when you take out a policy with Proadvice, you know at the moment you need it the plan will payout.  

Our Income Protection Specialists are waiting for your call

How does it work?

If something happened to you that stopped you working then the income protection plan would pay-out.  Proadvice will help you decide which policy is most suited to you taking into consideration a number of key points.

The most important of these is ensuring you get own occupation rather than suited or work tasks.  Many people take out income protection believing they are covered however when it comes to claiming finding out the wrong classification will stop a pay-out.  

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The facts

One of the best days of the month is pay day.  We spend all month working out where it is all going to go, all the important things such as the mortgage, the bills and the food shopping but also all of the fun things such as holidays, nights out and gifts for the children. But what happens if pay day stops coming?

Every year 300,000 people become long term sick and every day 1,589 people are made redundant.  All of these people have now lost their pay day.

Many people think they will be okay because they have some sick pay or even their savings, but what they do not realise is that the average time someone is off sick is between 5 - 7 years.  34% of people currently off work have been so for longer than 10 years.  Now, that is a long time to miss out on pay day. The number one reason why people lose their homes is due to sickness, that is a fact.  Make sure you are not another one of those statistics.  

Find out more

The following videos are created by a third party and neither Pro Advice Financial Services Ltd nor Sesame Ltd are responsible for the accuracy of the content.

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