Should I Get Income Protection Insurance?

May 5th, 2020
Should

 

PPl/ Payment Protection Plan have been extensively condemned, but this has also led to many people incorrectly judging that other policies such as an income protection plan is not valuable.

Income protection is a valuable tool, which is ideal for people who have dependants or those who would struggle to pay the bills If they were made redundant or simply too ill to work. So, if you suddenly fall ill or are made unemployed without prior warning, then having income protection insurance will give you the financial lifeline you require.

Last year, the UK had over 12,000 people claiming on their policy and only 10% were turned down on their income protection claim, according to the Association of British Insurers. Usually the maximum you can get from the income protection insurance policy is your net earning which excludes tax and other benefits you get from your employer. The amount you receive from the policy is typically not taxable and it works out to be around 70% of your gross income. Given the link to your income, it is important that that insured amount is adequate and that you review the policy should your income change.

Including the reasons above, there are many reasons why people consider income protection insurance such as when making a big debt financed purchase such as a house, or if they are moving jobs or perhaps there is a new born in the household – there really could be any reason, but it ultimately boils down to making ends meet when you are not able to receive/earn an income. the UK had over 12,000 people claiming on their policy and only 10% were turned down on their income protection claim, according to the Association of British Insurers. Usually the maximum you can get from the income protection insurance policy is your net earning which excludes tax and other benefits you get from your employer. The amount you receive from the policy is typically not taxable and it works out to be around 70% of your gross income. Given the link to your income, it is important that that insured amount is adequate and that you review the policy should your income change.

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