Winston Churchill in one of his famous quotes once said “Healthy citizens are the greatest asset any country can have”. And this is so true. However, in real-life nothing stays perfect for long. In fact, the chances of facing unforeseen situations that can be debilitating to our health such as sickness or injury are very real. And most often, it happens when we least expect it.

What is income protection insurance?

Income protection is actually an insurance policy that guards your finances in the event of an unexpected illness or sickness. A safety net that helps to keep the home fires burning until you recovered well enough to continue your job and generate income. Income protection works well for someone who is temporarily unable to fend for themselves due to illness or injury and will resume work after a period of recovery, however, it will not make payouts for example, if you are unable to work due to being made redundant.

How do the payouts happen?

These insurance policies cost lower than conventional life insurance policies. While most income protection payouts are based on you returning to work until retirement or death, there are also short-term income protection policies that can extend up to 1 or 2 years.

Income protection in the UK is flexible when it comes to you choosing how much you want to be covered. As a norm, the policy usually covers up to 60% of your salary. You can also specify how long you want the insurance to be for, along with how quickly you may need to expedite the payouts.

A point to remember is, income protection does not equate to critical illness insurance. While income protection makes payments on a regular basis helping you sustain yourself till you recover from illness or injury, critical Illness insurance payouts are done as a single bulk payment and not as periodic payouts. A critical illness insurance payout can be an asset when it comes to covering expensive hospital bills or paying off an existing mortgage when in financial difficulty.

Is income protection worth it?

It may not be surprising to know that income protection is a lesser-known insurance policy when compared to its counterparts such as critical illness coverage. The main reason here is rather when considering that the bigger portion of payouts is carried out with a critical illness cover, whereas income protection is paid as recurring smaller-sized payouts. But did you know that income protection policies are easier when it comes to receiving assistance? Yes, they are much easier than a critical illness insurance policy and are likely to make the payouts. While critical illness payouts may depend, if the claimant only has a certain illness (cancer, kidney failure, cardiac issues) to qualify, whereas income protection payouts are customarily made out for health-related issues such as mental stress or a spinal injury. Some insurance companies even go the extra mile to provide free care services such as physiotherapy, rehabilitation and counselling to help you with quick recovery.

As mentioned before income protection payouts could range between 60% – 70% of your monthly salary and will be done until you are fully recovered. And finally, income protection policies are pretty flexible and companies do offer more expensive policies that are designed to cover longer periods of time, as well as cheaper options with shorter periods of cover where the monthly payments sometimes can be even within the range of  £10 – £20 only per month.

At BVS insurance, you will be able to explore all these options and many more. Speak to our insurance experts for a complete guide on how to choose the right options for income protection policies in London and the UK.

Conclusion

We hope we changed your views on income protection if you were not convinced already, about what’s great about it. Choosing between a critical illness policy and income protection is clearly compared in this article from which you will be able to base and make your next policy decision.  It is evident, how income protection is flexible and offers regular payouts to those who are trying to make it through the month while recovering from injury or illness, unlike critical illness insurance which targets certain types of illnesses only. Let’s recap those valuable words of one of England’s greatest men Winston Churchill, and remember that ‘Healthy citizens are the greatest asset any country can have’.

Approved by the Openwork Partnership on 23rd February 2023