Discover the ideal income protection insurance for your needs. Life is unpredictable, and while we can’t foresee what’s ahead, we know that bills don’t stop, even when we’re unable to work due to illness or injury. Income protection insurance provides you with a steady “income”, helping you stay on top of your expenses when you’re unable to earn.
- Peace of mind that you will still get some form of income in the event of long-term illness, injury or accident
- Monthly or annual payment options
- You simply complete one form and can compare income payment protection insurance quotes online.
A guide to income payment protection insurance
Life is stressful enough, and then along comes a curve ball – you suddenly suffer from a long-term illness or become injured, meaning you may not be able to work for a while.
This is where income payment protection insurance is designed to step in.
What is income payment protection insurance?
Income Payment Protection Insurance (IPPI) is a type of insurance designed to provide financial support if you are unable to work due to illness or injury. It offers a regular income – typically a percentage of your usual earnings – to help cover essential expenses like mortgage payments, rent, and bills.
This cover ensures that you can maintain your financial stability and meet your obligations even when your ability to earn an income is temporarily disrupted.
What does income payment protection insurance cover?
Income payment protection insurance is designed to pay out for a set period if you temporarily lose your ability to earn an income due to a bad injury or illness. While policy features and benefits vary, typically it will pay you around 50-60% of your normal monthly income, usually for up to 12 months (or when you get back to work, whichever is sooner).
Income protection insurance cover is one of several different types of payment insurance policies designed to provide you with an income in the event of something unexpected happening such as illness or injury.
The other payment protection insurance options include:
- Mortgage payment protection insurance (MPPI) – These policies are typically sold alongside your mortgage. It helps meet your mortgage repayments if you lose your job through no fault of your own or become unable to work due to serious illness or injury. A policy typically kicks in three months after your earnings stop and continues to pay out for up to 12-24 months depending on your provider.
- Payment protection insurance (PPI) – This is also sometimes known as Accident, Sickness and Unemployment (ASU) cover. These types of policies are generally sold alongside a personal loan or credit card. It helps you meet your loan repayments by paying out a set amount for up to 12 or 24 months if you lose your income because of accident, sickness or unemployment.
Because there are different types of income protection insurance policies available, it is important that you know the cover you require. When choosing your policy, check that it provides everything you need it to – and check the exclusions.
Did you know?
Some income payment protection insurance policies will offer options to include cover for unemployment and (non-voluntary) redundancy. It is important you understand what the cover entails before you buy.
What exclusions do I need to be aware of when buying IPPI?
When buying income payment protection insurance, it’s important to understand the common exclusions that may affect your cover. Here are key exclusions to be aware of:
- Pre-existing medical conditions – Most policies will not cover illnesses or injuries that were known or diagnosed before taking out the insurance.
- Short-term contracts – Individuals working on short-term or temporary contracts might find that these are not covered.
- Waiting periods – There is usually a waiting period (also known as the deferral period) before you can claim the policy benefits. This can range from one month to several months, depending on the policy.
- Age limits – There might be age restrictions on who can take out a policy or until what age the policy can provide cover.
- Part-time workers – Some policies have specific rules about how many hours you need to be working to be eligible for cover.
- Health exclusions – Certain health issues, especially mental health conditions and back problems, may have limited cover unless there is objective medical evidence like tests or scans.
- Lifestyle choices – Exclusions can apply for claims relating to drug or alcohol abuse.
It’s essential to carefully review the terms and conditions of any income protection policy to understand what is and isn’t covered. Consulting with an insurance professional can also help clarify any points and ensure that the policy meets your needs.
If you choose income protection insurance with unemployment cover as an add-on, you should also be aware that the following exclusions may also apply:
- Unemployment by choice – Voluntary redundancy or quitting your job without another job lined up typically isn’t covered.
- Dismissal due to misconduct – If you are dismissed from your employment due to misconduct, you may not be eligible for benefits.
- Self-employment issues – Some policies do not cover business closure or bankruptcy if you are self-employed.
What happens if I don’t declare a pre-existing illness or medical condition when buying income payment protection insurance?
Failing to declare a pre-existing illness or medical condition when buying any type of payment protection insurance can have significant consequences:
- You could have your claim rejected – If you make a claim related to the undisclosed condition, the insurer may deny it. This is because insurers assess risks based on the information you provide at the time of application. Undisclosed conditions can be viewed as misrepresentation of risk.
- Your policy could be cancelled – The insurer might cancel your policy if they discover that a pre-existing condition was not declared. This would not only mean losing your cover but could also make it harder to obtain similar insurance in the future.
- You may not receive a refund if your policy is cancelled – Typically, if your policy is cancelled due to non-disclosure, you will not be entitled to any refund of the premiums already paid.
- Difficulty getting insurance cover in the future – Non-disclosure can be recorded on your insurance history, which might affect your ability to get other types of insurance at a reasonable rate.
To avoid these issues, be transparent about your health history when applying for income protection insurance. Full disclosure ensures that you receive the correct cover and that any future claims you make are valid and less likely to be contested by your insurer.
Did you know?
You may already have some form of income payment protection insurance in the form of permanent health insurance with your employer. They might refer to it as income protection, group income protection, long-term disability (LTD), or salary continuance. Check with your HR department if you are not sure.
How is the cost of income payment protection insurance determined?
There are affordable payment protection insurance options – the cost will be influenced by your age, occupation, income level, and the cover amount. Some policies will pay out for 24 months instead of 12 months – these will typically attract a higher cost.
Why compare income payment protection insurance?
As we mentioned before, there are different types of income and mortgage protection insurance policies available. And within each of these, there are different levels of cover and optional add-ons.
By comparing income payment protection insurance quotes, you can see which provider offers the most suitable and cost-effective policy for your own unique circumstances.
Make sure you fully understand what the cover includes, as well as any policy exclusions.
How to compare income payment protection insurance quotes easily
What is the easiest way to compare quotes for IPPI? By using our service! It costs you nothing to get a quote and you can easily compare cover on a like-for-like basis. That way you can choose the income payment protection cover that most suits you and your budget.
Did you know?
You may already have some form of income payment protection insurance with any existing mortgage, loan, or credit card. Ask your lender if you are not sure.
Money savings tips for your income payment protection insurance
How can you save money on income payment protection insurance? Read on…
- Choose how long your income payments will last – Short-term income protection policies typically run for 12 – 24 months. There are longer-term policies – often known as permanent health insurance – that can run indefinitely, until you get back to work or when you retire. A short-term IPPI policy typically may be more cost-effective than a longer-term policy.
- Choose a longer waiting period – Some IPPI policies allow you to select the waiting period (also known as a deferral period) – this is the period that you have to wait after you make a successful claim until you receive the payment. A longer waiting period can result in lower premiums.
- Shop around – Using a service such as ours can help you get a broader sense of the policy options, cover available, and the costs.
In summary: Buying income payment protection insurance
You may be wondering: Is income protection insurance really worth it? That is of course for you to decide, but affordable income protection insurance options are available, so it may be worth getting a quote – especially if you have dependents relying on your income.
If you’re ready to secure your finances and have peace of mind, then why not compare income payment protection insurance now?
Get income payment protection insurance quotes now!
To get income payment protection insurance quotes from a panel of specialist insurance providers, please click the button below.
Income Protection Insurance FAQs
What does an income protection policy cover?
It covers a portion of your earnings if you’re unable to work due to illness, injury, or (a new) disability. It generally does not cover termination or redundancy. That said, there are insurance policies available where you can add on unemployment and (non-voluntary) redundancy cover.
Is permanent health insurance the same as income protection insurance?
Yes, both provide regular payments when you’re unexpectedly unable to work, helping you maintain your financial obligations. This insurance prevents debt accumulation and gives you peace of mind while you recover from illness or injury. It is important to note that you can get both short-term income payment protection insurance (paying out for 12 – 24 months or when you get back to work, whichever is earlier) or longer-term policies that pay out until you get back to work or retire.
Will income protection insurance match my full salary?
No, most IPPI policies provide between half and two-thirds of your usual pre-tax salary or income.
When will income insurance start paying out?
Payments typically begin at least four weeks after you stop working, but this varies among providers. The insurance will need to have been in force for a set period before you can make a claim, so check the policy terms and conditions.
Can I get income protection insurance if I’m self-employed?
Yes, some insurers offer cover for the self-employed. Ensure you declare your self-employed status during application. Payment terms may differ, considering your variable income.
How long does income protection insurance last if I can’t work?
Most policies offer a two-year term, although some may only cover 12 months. You can get longer-term policies (more than two years), but these typically may cost more.
What is income payment protection insurance (IPPI)?
IPPI is a type of insurance that provides a regular income if you’re unable to work due to illness or injury, helping towards essential living expenses and other bills. If you want to make sure your mortgage payments are covered in full should you become unable to work, then mortgage payment protection insurance may be a better fit for you.
How much of my income will IPPI cover?
Typically, IPPI covers between 50% to 70% of your pre-tax income, depending on the policy.
I have become ill and am unable to work. When does the income payment protection insurance payout start?
Payments usually start after a waiting period, often 4 to 12 weeks from the time you stop working. The specific waiting period depends on your policy. You may get more affordable cover if, when taking out your policy, you opt for a longer waiting (deferral) period.
Is IPPI mandatory in the UK?
No, income payment protection insurance is not mandatory, but it is recommended for those who want financial security in the event of an income loss due to unforeseen circumstances that make you too ill to work.
Does income payment protection insurance cover unemployment or redundancy?
Some IPPI policies include the option to add on cover for becoming unemployed or (non-voluntary) redundancy, but it’s important to check your specific policy details as this is not always standard.
Can I choose the length of the waiting period?
Yes, many income payment protection policies allow you to select the waiting period. A longer waiting (deferral) period usually results in lower premiums.
Does income payment protection insurance cover pre-existing medical conditions?
Cover for pre-existing conditions varies by insurer. Some policies may exclude them, while others might cover them after a specified period. Make sure you always declare any pre-existing condition when buying your cover.
Can I still receive state benefits if I claim income payment protection insurance?
Yes, you can receive state benefits alongside IPPI, but the amount you receive from your insurance may affect your eligibility or the amount of state benefits.
Is there a limit on the number of claims I can make?
Generally, there is no limit to the number of claims you can make, but each claim must meet the policy’s criteria, and the total payment period may be capped.
What happens if I return to work earlier than expected?
If you return to work before the end of the benefit period, your IPPI payments will typically stop. Some policies may offer partial payments if you return to work part-time.
How do I choose the most suitable income payment protection insurance policy?
To choose the most suitable cover, consider factors such as your financial needs, the length of cover, the waiting period, and whether the policy covers unemployment and redundancy. Comparing quotes and reading the policy details carefully is essential to ensure it meets your requirements.