As we’re all realising in this uncertain time for the economy and our families earning an income is one of the most important factors for your family. You don’t really expect for it to be compromised or taken away from you but you never know what’s around the corner and with the current Pandemic, it’s a start reality of what could happen. Isn’t that reason enough to make sure we’re protecting ourselves and most importantly, our family?
It’s been brought to my attention as a business owner and father, that income protection should be a consideration for all.
Ask yourself two questions:
-How would you cope if you weren’t bringing in money to keep your children fed and clothed?
-How would you cover the rent or mortgage payments and keep life as they know it afloat?
What is income protection?
Income protection does what it says on the tin – it protects your income. It enables you to pay your bills and provide for you and your loved ones if something happens and you become too ill or injured to go to work, providing between 50% and 70% of your salary.. Where state benefits can and do change in line with government policy, this cover is a contract and a promise to you that won’t change.
- Provides you with a safety net
- You can choose a policy built around your own circumstances
- You can cover as much of your income as possible or just protect your mortgage or rent repayments. It’s up to you
- If you recover and go back to work, reach state pension age and retire or pass away during the period of the claim then your policy will end
- Cost of income protection depends on your lifestyle, age, job, hobbies, current health, medical history and level of coverage that you’d like
- You also need to decide on a ‘deferral period’ which is how long it’ll take between you making the claim and beginning to receive your payout. The longer the deferral period is, the cheaper the premiums will be
What about if I’m self-employed?
Many people reading this will be self-employed – other bloggers perhaps. When you’re self-employed and you have a mortgage, a family and you don’t have a significant amount of money in the bank to fall back on, what would you do? This is a really important product for the self-employed.
- Could pin your hopes on qualifying for Employment and Support Allowance, which is financial support from the government if you’re unable to work due to illness or disability. Although that option is available, you’ll be provided with much more money if you claim on an income protection policy
- Income protection should be factored in as part of your business plan so that you and your family can still get by without your income
- When self-employed and taking out an income protection policy, your monthly income is based on your share of the pre-tax profits generated by your business
- The amount of cover that you’ll need will depend on the size of your mortgage and whether you have taken out any loans to build up the business
- Income protection is also available to primary carers, part-time workers, contractors and more
- Even if you have some difficulty proving your income, there are plenty of options available
Whilst income protection takes on a whole new meaning when you become a parent with little lives to look after, it’s an important product for anyone with an income. If becoming ill or injured and being out of work means that you can’t pay the bills – dependents or no dependents – then take a look into this insurance product and protect the life you love.