Short-Term Income Protection

December 12th, 2019

Find out about short-term income protection insurance; learn the essentials about what it covers and the items it doesn’t cover. Be informed about whether you require protection for accident, sickness and/or unemployment.

Points to note

You can get monthly payments if you’re unable to work for up to 12 months.

Accident, sickness and unemployment can be covered – you are advised to study the terms of your policy and note any exclusions.

By paying a higher premium, you can get a longer-term policy.

Critical illness cover can be covered.

Insurance for short-term income protection means that if you are unable to work for a certain time period, which is most often six months to a year, you can receive monthly payments.

Examples of when this may be of benefit are if you are injured following an accident, or made redundant, and you are unable to earn your normal monthly wage for a set length of time.

Providers of income protection usually cover a percentage of your monthly pay; as an alternative, they will pay your mortgage or any debt repayments you may have.

One of the attractive advantages of short-term income protection is that it could help you to cover the gap between your outgoings and reduced income from statutory sick pay.

However, if you were to fall seriously or terminally ill, this type of protection would not provide adequate cover; it is for temporary periods of unemployment only.

However, terminal illness cover is available on many life insurance policies.

You can generally choose from 3 types of cover:

  • Accident and sickness only
  • Sickness and unemployment
  • Unemployment only

Be aware that if you take out unemployment only cover and you are off work due to illness or an accident, your insurer will not pay out; this type of cover is only for being off work due to redundancy.

Similarly, accident and sickness cover would not offer protection if you were to lose your job for any other reason.

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