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Income protection insurance – what is it?

Ever wondered what income protection really is? Or perhaps, more likely, you’ve never actually heard of it?! Well, here’s why we think you should know more….







Imagine if you got injured in a car accident, or you were struggling mentally and really needed some time off? While your ability to work may stop (temporarily, we hope), those pesky monthly bills won’t! Income protection insurance could save you from running out of money when you’re unable to make any. Basically, it’s sick pay that’s provided by an insurer!



What is income protection insurance?

You’ve definitely heard of insurance, and you might even have some insurance policies for things like your car, home, or travel? And let’s be honest, you probably don’t feel great about spending money on insurance. But while your car and mobile phone insurance looks after your possessions, income protection insurance looks after you! So, we think it’s worth spending a bit of cash on…


Just like a car insurance policy will pay out to repair or replace your car should you get in a car accident, income protection is an insurance policy that will pay out if you can’t earn an income anymore, so that you can keep paying your bills and carry on living that Netflix and Deliveroo lifestyle (because these are priorities right?!)


Do I need income protection insurance?

You might think “oh I can just dip into my savings if I’m off work for a few weeks”, or you might tell yourself that you could just take sick leave if you needed to. But did you know some companies only pay sick pay for a few weeks (shocking, right?!). And there’s always the option of moving in with family to help with the bills, but who really wants to do that? So, the answer to the question above – probably, YES!


Claiming on income protection insurance

While your income might stop if you fall ill or have an accident, your bills probably won’t – they still need to be paid unfortunately. And your savings and sick leave will likely only last so long. Income protection insurance is there to help you cover your monthly bills and expenses if you can’t work.


A policy can replace your income for as long as you need it, and usually covers you for any illness or injury that stops you doing your day job, whether that’s mental health reasons, a broken bone, or something terrifying like cancer. Anything that stops you doing your job will typically trigger a pay-out from your policy. (Just so you know, it doesn’t cover you if you get fired or become unemployed though, income protection is designed more for illness, injury or accidents).


Typically, insurers pay out between 50% and 70% of your income if you can’t work. And you don’t have to pay income tax on that money either!


Want to find out more?

Insurance might not be at the top of your priority list right now, especially when you’re young, healthy and thriving. But if there’s anything the last few years have taught us, it’s that life can be unpredictable, and planning for the unexpected is always worth it.


Plus, it’s actually better to get income protection insurance when you’re young and healthy because it means you’ll pay less (your insurance premiums will be lower), win win!


Want to know more about income protection insurance and how much a policy would cost you? We’ve partnered with the expert financial advisers at Caspian insurance who can provide free support and help you on your journey to getting financially protected!




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