It’s a worthwhile exercise learning about long-term income protection insurance; in particular gain knowledge about the items it specifically covers and whether it is suitable for you.
Points to note
One advantage is that if you find yourself unable to work such as after an accident or during recovery from illness, you can get monthly payments.
It’s advisable to study your terms and conditions so that you are fully informed about what you are covered for and, critically, what you are not covered against. Know in advance when payments will begin.
However, critical illness cover may offer you better protection so compare this, against income protection first.
Should you become seriously or even terminally ill and can no longer work, whether for life or an extensive period of time, long-term income protection can cover you.
Payments are usually made after a defined period of time, such as between four and 52 weeks. They will usually continue until you are fit enough to return to work or when your policy expires, such as at retirement or the end of a fixed term.
You can also take out short-term income protection options which will offer a lower level of protection but may be more suitable to you,
Income protection and critical illness cover
These two types of cover are often confused, mainly because they appear similar but they are in fact two distinct types of cover.
Which should you take out – critical illness cover or income protection?
Before rushing to take out one of these policies, it’s best to be fully informed about both and compare the different criteria of each.
If you’re too ill to work, whether for a short or long period, an income protection policy should pay out to cover this. Critical illness protection pays out for specifically listed conditions on your policy, in the event you are diagnosed with one of these, which would mean you are probably not going to be able to work again for life.
Critical illness insurance considers you as an individual.
Income protection policies usually pay a monthly amount that corresponds to your normal monthly income. In contrast, critical illness policies typically offer a single lump sum pay-out that may not correlate to your salary.
Income protection considers your job-related income.
You can be the decision-maker on the amount of cover you need and your premiums will be in accordance with this.
Change of job
Always inform your provider if you change your job or career as the policy will probably need to be adjusted.
Check if terminal illness is factored into your policy.
Tips on the right product
Life insurance can seem complicated and a heavy financial commitment. At Freepricecompare, our partners are trusted and vetted and will offer impartial, cost free advice to help guide you.
Compare Life Insurance
Get quotes from the UK's leading Insurance Providers in Minutes