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No money to buy food?
​How long would your finances hold out?

Income Protection

What is income protection insurance?
 
Formerly known as permanent health insurance (PHI), long-term income protection (IP) is an insurance policy that pays you an income benefit if you're unable to work due to injury or illness.
 
You can select how long the income benefit is paid for, but IP policies usually pay for any period up to retirement, death or your return to work. IP policies do not usually pay out if you're made redundant, but will often provide 'back to work' help if you're off sick.
 
Relatively few people have this insurance though we think every working adult in the UK should consider it.
 
How much does income protection pay out?
 
Income protection policies usually pay based on a percentage of your gross taxable earnings: Between 50% to 70% is the norm. Payments are tax-free.
 
IP policies only pay out once a pre-agreed period has passed following the disabling illness or accident date. These deferral periods generally range from one to twelve months after you put in a claim. This is called a deferral period. The longer the 'deferral' period you choose, the lower your premiums. The usual deferral period tends to be 13 or 26 weeks to keep premiums affordable, but we have insurers who will quote for benefit starting at 4 weeks. 
 
The benefit will continue to be paid until you are either fit to return to work or the selected end date of the policy. Usually this will be your normal retirement date, but the choice is yours. Shoter periods will help reduce premiums marginally.
 
Why do I need IP?
 
According to research by providers, just 12% of employers support their staff for more than a year if they're off sick from work. Most provide little in the way of sickness benefit and rely on you obtaining the state benefit. Given the low level of state benefits available, everyone of working age should consider IP, but when we asked the public, just 9% said they have some form of IP, compared with 41% who have life insurance and 16% who have private medical insurance (PMI).
 
One industry survey showed less than a quarter of people deemed protecting their income to be essential, compared with 74% who said the same of needing access to broadband internet.

​

Lloyd Vine Limited. Independent Financial Advisers & Mortgage Brokers. Authorised and regulated by the Financial Conduct Authority. 832055.
Copyright All Rights Reserved © 2019 Lloyd Vine Limited. Company Number: 11783591


Normal Hours

Mon - Fri : 9am - 5pm

Telephone

023 80601601

Email

info@lloydvine.co.uk

About Us


  • Home
  • Insurance
    • Business Protection >
      • Key Person Insurance
      • Shareholder Protection
    • Employee Benefits >
      • Group Income Protection
      • Group Life
      • Group Private Medical
      • Relevant Life Cover
    • Personal Protection >
      • Critical Illness Cover
      • Income Protection
      • Life Assurance
  • Investment
    • Pension & Retirement >
      • Auto Enrolment
      • Company Pensions
      • Flexi-Drawdown Pension
      • Group Personal Pension
      • Pension Annuity
      • Personal Pension
      • Self-Invested Personal Pension
    • Savings & Investments >
      • Investment Bonds
      • Investing For Children
      • ISA (individual Savings Account)
      • Lifetime ISA
  • Mortgages
    • Your Home Mortgage >
      • Introduction
      • Property Surveys
      • Mortgage Consultation
    • Buy To Let >
      • Buy to Let Types
      • Portfolio Landlords
    • Commercial Mortgages >
      • Commercial Mortgages
      • Limited Company Buy to Let
    • Holiday Home Finance
    • Let to Buy
    • Second Home
    • Self Build
    • Mortgage Calculator
  • Contact Us
  • News
  • Documents