It might be the case that you are concerned as to how you would cope, financially speaking, if misfortune meant you were unable to work and obtain the income necessary to maintain your existing lifestyle.
Below there are some commonly asked questions on the subject, together with some associated responses. However, if you wish to find specific details relating to things such as disability insurance, it might be advisable to check with experienced providers of such cover, including specialists like Drewberry Income Protection.
Can I protect my income against a range of risks?
Typically yes, although your own personal circumstances might influence the shape of that cover and how much it will cost you.
Why have I seen mention of two types of income protection cover?
The insurance industry provides a range of policies in the area of what might generally be called income protection.
Broadly speaking, these policies break down into two generic forms:
- short-term cover, typically making payments over a period of perhaps 1-2 years. The risks covered by such policies might typically include things such as compulsory redundancy, sickness and accidents, as reasons why you found yourself in the position of being unable to work for a medium-term period of time;
- longer-term or indefinite cover. These types of policies are typically associated with serious or critical medical conditions that have left you disabled or unable to work over a potentially lengthy period of time. Some policies of this type might offer to pay you a monthly income up until your normal date of retirement.
What is the difference between ASU insurance, unemployment protection and critical illness insurance?
Within the two categories of cover outlined above, individual insurance providers may use different terminology to describe their products.
What is important ultimately is what cover the policy actually provides, rather than the specific product branding that the insurance provider has used.
Broadly speaking, ASU (Accident, Sickness and Unemployment) and unemployment protection (sometimes called redundancy insurance) are both examples of shorter term cover.
Critical illness policies typically operate on the basis of paying you a lump sum in the event you are diagnosed with one of a specified range of critical medical conditions.
By contrast, income protection insurance will provide you with a longer-term monthly income should you be, for example, disabled and unable to continue working.
To avoid confusion and the risk of selecting a policy that is not addressing your particular concerns, it is important to choose a provider who will be willing to explain to you the differences of the above cover types in more detail.
What role would my medical history play in obtaining income protection cover?
That is difficult to say as it may depend upon your health history and the practices of the insurance provider concerned.
Contrary to what you might expect, you might be able to get existing medical conditions included under cover.
What is critically important is that you fully and frankly declare the details of your medical history at the time you take out your policy. Being economical with the truth might invalidate your cover in the event of a claim.
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You may feel you know exactly what you mean by the phrase “Income Protection”. We have come to realise that there is a big difference between what people within the financial services industry call income protection and what the majority of customers understand it to mean and actually want. We want to give you every opportunity of buying a policy that does exactly what you want it to do. This website is packed full of information about various income protection policies and how they work.