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Managing risk effectively
"It's reassuring knowing my income will remain intact if anything bad happens"
T Walker, Operations Director, Junior Heroes, London
T Walker, Operations Director, Junior Heroes, London
Everything we aspire to revolves around us having a steady, and hopefully increasing, income stream. This is why Income Protection is an absolutely integral part of the financial planning process.
Being off work ill for a sustained period of time would mean a period of sustained financial hardship and could even involve you losing your home, your assets and forsaking your future dreams.
Income Protection
An income protection policy replaces your income in the event of you being ill off work for a sustained period. There is an initial waiting, or deferment period, prior to the onset of payment of the benefit. This can be 1, 3 and 6 months most commonly. The large the sum insured to be paid on a monthly basis, the more expensive. Likewise, the shorter the deferment period the more expensive.
These policies are comprehensively underwritten up front. The insurers may request a report from your Doctor or for you to undergo a medical examination. The cost of these are borne by the insurer.
These policies pay out free of income tax so we generally insure for no more than 50% of your gross Income. Lower risk occupations can generally obtain an ‘Own Occupation’ definition for the insurance. So, if you were unable to perform you own job the benefit can be paid. Higher risk occupations are usually assigned a Work Tasks definition.
Such technicalities are why it is a must to receive specialised advice. Contact us at Independent James for tailored income protection advice to secure your future.