Insurance… it’s not in the least bit exciting, is it? When you hear about yet another insurance product that you need to take out, it just induces that mundane feeling of handling yet more life admin. Car insurance, home insurance, pet insurance… the list goes on. As a parent, you’ve probably got a list as long as your arm of things to pay for each month.
So, when someone tells you that you need life insurance or a certain form of life insurance, you may find it hard not to roll your eyes. Another one? Really? Really though – of all the insurance products out there, life insurance products are arguably the most important and in particular, income protection insurance.
What is income protection insurance?
Income protection is designed to, well, protect your income! If you become seriously ill or injured and can no longer go to work, income protection will pay out a portion of your income regularly, to ensure that you can continue to meet your financial responsibilities. You decide how much your regular payouts are. Typically, they cover 50-70% of your income.
Once you have made a claim and your payouts have started, your policy will continue to support you until you either go back to work, reach retirement or pass away during the claim period – whichever comes first!
Do I actually need it?
No one is obliged to take out income protection insurance – or any other life insurance product. It’s highly recommended when you take out a mortgage, but not mandatory. But just think about it for a moment – do you think you’d be more likely to pass away before retirement, or become seriously ill or injured? Probably the latter.
In fact, one million workers a year suffer a serious illness or injury that leaves them unable to work. Who’s to say you won’t be one of those million? It’s important to ensure that you have adequate protection in place against such a by-no-means-rare scenario. Especially as a parent, financial responsibility feels so much heavier when you have little lives to protect. Income protection acts as a safety net when you need it most to keep family life as normal as possible when life takes a turn.
You might not need income protection if your household can continue to get by on just your partner’s salary. You might also have a lot of savings to fall back on – but remember, that money will run out one day. Injury and illness is often a long-term issue, and you might be out of action for longer than you’d expect. The regular payouts from an income protection policy will support you for as long as you need them to.
What does income protection cover?
So, what can you actually claim on? Income protection covers you for most illnesses that leave you unable to work for a period of time – or ever. This could be a serious heart condition, cancer, stress-related illnesses or back conditions. The focus isn’t necessarily on the injury or illness you are unlucky enough to encounter, but more on the impact it has on your working life. Every policy is slightly different though, so make sure you are familiar with the terms and conditions or speak to your insurance company to be totally clear about what is and isn’t covered.
If you have any pre-existing medical conditions when you take out your income protection policy, those will not be covered. Anything self-inflicted also won’t be covered, such as alcohol or drug misuse, cosmetic surgery, war-related issues or pregnancy.
The COVID-19 pandemic has, unfortunately, lead many people to experience perhaps for the first time what it is like to be out of work due to illness. Income protection has never been more important, and you’ll never regret investing in your financial safety!
Collaborative post
