Income Protection
Income Protection
Protect Your Income, Secure Your Future
Protect Your Income, Secure Your Future
Comprehensive income protection to ensure you're financially covered when you need it most.
Providing comprehensive income protection insurance to ensure you're financially covered when you need it most.
For more information, advice or a quote fill in the form with your details and we will contact you.
How Income Protection Works - Courtesy of Vitality
Benefits of an Income Protection Policy
Income Protection: Ensuring Financial Security, Flexibility, and Peace of Mind.
An income protection policy plays a vital role in ensuring a stress-free recovery period. Being unable to work due to injury or illness is stressful enough without having to worry about financial obligations. With income protection, you'll receive a regular payout to cover your living costs, thus alleviating financial stress. This means you can concentrate solely on your health and recovery, without being burdened by the concern of meeting your financial commitments. This peace of mind can significantly contribute to a more effective recovery process, as you're able to rest, recuperate, and follow medical advice without the distraction of financial worries.
Your standard of living is directly tied to your income. If that income were to suddenly stop due to illness or injury, it could have a significant impact on your lifestyle. This is where income protection insurance steps in. By providing a regular payout, an income protection policy helps ensure that your lifestyle remains unaffected even if your earning ability is temporarily compromised. You can continue to meet not just your essential needs, but also maintain your regular lifestyle choices. This could mean anything from continuing hobbies and leisure activities to ensuring your children's education isn't disrupted, or even simply being able to enjoy the same comforts and conveniences at home that you're used to. This coverage helps to minimise the disruption in your and your family's life during your recovery period.
In the United Kingdom, the proceeds from an individual income protection insurance policy are generally not taxed as income. This is because the premiums are paid from post-tax money; that is, you've already paid tax on the income you used to pay the premiums.
How much of my income can I insure?
The amount of income you can cover with income protection insurance varies depending on the policy and the insurer, but it's typically between 50% to 70% of your gross (pre-tax) income. Some insurers may offer to cover a higher percentage.
The reason it doesn't cover 100% of your income is to provide an incentive for the policyholder to return to work once they're able to do so.Remember that benefits from income protection insurance are usually paid tax-free (for individual policies where you've paid the premiums with post-tax money), so the net amount you receive may be closer to your take-home pay than it might initially seem.
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How much does income protection cost?
The premium for an income protection policy can be influenced by several factors, including:
AGE
Generally, the older you are, the higher the risk of you becoming ill or injured and needing to claim, so premiums tend to be higher for older people.
OCCUPATION
Generally, the older you are, the higher the risk of you becoming ill or injured and needing to claim, so premiums tend to be higher for older people.
HEALTH & LIFESTYLE
Pre-existing health conditions may increase your premium. Lifestyle factors, such as smoking or high-risk hobbies, can also result in higher premiums.
DEFERRED PERIOD
The deferred period is the time you must be off work due to illness or injury before your policy starts paying out. The period can range from 1 week to months and affects your premium cost. Longer deferred periods typically result in lower premiums.
INCOME LEVEL
Your premium depends on the amount of income you wish to insure. Higher income to replace means higher potential payout from the policy, leading to a higher premium. It's essential to accurately report your income to ensure adequate cover and avoid overpaying.
BENEFIT PERIOD
The payout period of an income protection policy defines how long you'll receive benefits. Options vary from short-term (1-2 years) to long-term (up to retirement) or age-based (until a specified age). Your choice should reflect your financial status and risk tolerance.
An income protection policy is an insurance policy that pays out if you're unable to work because of injury or illness. It ensures you receive a regular income until you retire or return to work
The payout for income protection insurance typically ranges from 50% to 70% of your gross salary. However, it varies based on the policy terms and conditions.
In the UK, income protection insurance payouts are usually tax-free. This is because you pay the premiums with after-tax money.
Income protection insurance typically covers you if you can't work due to illness or injury. It usually does not cover unemployment due to reasons such as redundancy.
Most income protection policies have a deferred period, which is the time you have to wait from when you're ill or injured to when you start receiving benefits. The length of this period can often be chosen at the start of the policy.
Yes, it's possible to have more than one income protection policy. However, the total amount you receive from all policies combined cannot exceed a certain percentage of your income (usually 50-70%), and insurers need to be informed of other existing policies.
The cost of an income protection policy varies widely depending on several factors, including your age, health, occupation, the level of cover you require, and the length of the deferred period.
If you change jobs, your income protection policy usually continues without any changes, as it's based on your ability to work due to illness or injury. However, it's important to notify your insurer about your new job, especially if it involves higher risks.
Yes, income protection policies are especially beneficial for self-employed individuals, as they might not have the same sick pay benefits as those in employment. The policy can provide a consistent income if they're unable to work due to illness or injury.
Income protection provides a regular income if you're unable to work due to any illness or injury. In contrast, critical illness cover pays out a tax-free lump sum if you're diagnosed with one of the specific illnesses listed in the policy, like cancer, heart attack, or stroke.
Do you have more questions?
To find out more about income protection policies including:
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Please complete the form opposite and we will be in touch
Please complete the form opposite and we will be in touch
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As with all insurance policies, conditions and exclusions will apply.
Your home may be repossessed if you do not keep up repayments on your mortgage. Think carefully before securing other debts against your home. You may have to pay an early repayment charge to your existing lender if you remortgage.
A typical fee for arranging a mortgage is £299. However, the actual fee will depend on your circumstances but will not exceed £999.
DS Financial is a trading style of Darren Shepherd, who is an Appointed Representative of Stonebridge Mortgage Solutions Ltd which is authorised and regulated by the Financial Conduct Authority.
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