| |
income Protection Insurance
WITH PREMIUMS AS LOW AS £3.00 per
£100 of monthly cover |
|
| DAY ONE COVER THIS MEANS
NO EXCESS PERIODS |
| ALL YOUR LIFESTYLE EXPENSES INSURED
UNDER ONE POLICY |
|
|
Explaining Income Payment Protection Insurance Cover
Many people are highly risk averse when they are seeking
to preserve capital and this is primarily because they know that they
will find it hard to replace their money if they lose it.
It is, for example, not unusual for someone who receives a £20,000
inheritance or redundancy payment simply to place it in a High Street
deposit account, where the interest it earns may not even keep pace
with inflation in the long run.
But the very same people tend to take a far more cavalier approach when
it comes to protecting their income. In short, most do absolutely nothing
about the problem.
This is certainly strange because even a moderate earner nowadays could
be £20,000 worse off if they were deprived of their take-home
salary for a year, and such a situation could easily arise if they were
suddenly made redundant or suffered a serious injury or illness.
But it is human nature to feel that such misfortunes only ever happen
to others, and many people also fail to appreciate the highly limited
nature of the so-called State safety-net.
The exact benefits that anyone who is forced to rely on the State is
entitled to will vary according to individual circumstances, but you
can rest assured that whatever you receive will not allow you to do
more than subsist.
Unless you have an unusually generous sick pay scheme at work, the only
real alternative is to make private provision via insurance to ensure
that your income is protected.
Income payment protection insurance cover, which pays out a monthly
benefit for a maximum of one year if you are unable to work as a result
of involuntary unemployment, illness or injury, could be the answer.
The product should not be confused with another one known simply as
“income protection”, which offers longer-term health cover
but which does not protect against unemployment at all.
The best income payment protection providers can charge as little as
£3.00 a month per £100 of monthly cover and premiums are
not affected by factors such as age, medical history and smoking habits.
Providers will, however, typically impose a restrictive maximum benefit
limit of £1,000 a month or half your income, whichever is the
lower.
]
Whilst this is unlikely to be sufficient to protect your overall outgoings
if you have a mortgage, there is nothing to stop you taking out a mortgage
payment protection insurance (MPPI) policy in addition to safeguard
against exactly the same incapacity and involuntary unemployment risks.
There are also some other potential drawbacks to income payment protection
insurance cover that should receive due consideration.
If you suffer from an ongoing medical condition then this cover may
not be for you, because medical problems you have developed before the
policy begins are excluded.
The same applies if you think that you might have the opportunity and
inclination to take voluntary redundancy - which is excluded.
Self-employed people should also be aware that the product only pays
out for involuntary unemployment if they permanently cease trading and
will not cover them if they simply experience a lean patch.
|
