Income protection insurance gives you financial cover when you are rendered disabled and unable to work due to illness or injury. Income protection can be a lifeline when you are faced with such a situation, moreover when you are in the midst of paying your mortgage. There are some misconceptions surrounding it. Here we explore 5 misconceptions about income protection in the UK. 

Myth #1: I don’t need income protection if I have savings

Savings and sick pay can help support you, but it may not be enough when you are unable to work for a lengthy period of time. With income protection insurance you’re entitled to claim 50%-70% of your income for the duration of your policy term. This could be a short term (1-2 years) or long term (until you return to work, retirement or death). Savings on the other hand may not be able to see you through the entire time period you are out of work. In addition to this, having an income protection cover enables you to hold on to your savings for future expenses.

Myth #2: Income protection insurance is expensive

In reality, premiums for income protection insurance are cheaper than most people think. Like every other insurance policy the cost of income protection insurance depends on various factors such as your age, length of your deferred period, health, lifestyle, length of cover and job. The average cost for income protection is £6 to £50 per month and depends on your individual factors. By choosing shorter terms or a longer deferred period you have the flexibility of adjusting the policy to fit your budget.

Myth #3: I don’t need income protection if I have critical illness cover

Critical Illness cover is designed to payout in the event you are diagnosed with a serious illness but you can only make a claim if this illness is specified in the cover, and it does not cover injuries. Income protection does payouts in the event you are injured in addition includes a cover for a wider spectrum of illnesses. As always, it's essential to review the policy details to understand the specific areas of coverage and exclusions.

Myth #4: I can’t get income protection insurance because I have a medical condition

While pre-existing medical conditions may make it difficult to take out an income protection insurance policy, it is not completely impossible. Medical conditions are assessed on type of illness and its severity. If your condition is mild to moderate you may be able to get insurance at the normal premium rate, but if your condition is severe or is considered too risky, your insurer will either increase the premiums to meet the risk factors or exclude the pre-existing condition from your cover. What type of policy you get in this circumstance will depend on the insurer and how you want to tailor your policy. To understand how to get an income protection policy with a pre-existing medical condition speak with our expert advisors today.

Myth #5: I can’t get income protection because I am self employed

You may already be of the opinion that being self-employed excludes you from obtaining an income protection insurance since you do not receive a monthly salary. But being self employed is certainly not an obstacle to you getting onboard an income protection policy. On the contrary, getting yourself income protection insurance could actually be a benefit. Depending on the type of policy you’ve been on boarded on, your insurer will calculate the cover on your average based on your monthly income. And when it comes to payouts, you can expect a 50%-70% of this amount to be paid back on a monthly basis.

Conclusion

Like most myths, some explanation is required to dispel them and make us look at the ‘real’ situation,  insurance is no exception. We believe this article helps dispel some myths tied to income protection. 

The benefits of obtaining income protection is obvious. Especially at a time when you really need financial help during times of distress. However, like in any other insurance policy your decision to get income protection should be based on your individual circumstances. Speak to an experienced insurance advisor at BVS Mortgages and Financial Services, they will be able to guide you to make informed decisions and help you reap the benefits offered through income protection.