You might believe you’d be more likely to call on your income protection policy later in your working life but data from protection insurer, The Exeter, show their average claimant was 40 and on certain products, just 33.
Income protection is designed to pay an income if you’re unable to work as a result of an accident, illness or with some policies, unemployment. The benefit usually kicks in after what’s called a deferred period and can last until you’re able to return to work or you retire.
Cover for physical, and non-physical conditions
Every year, one million workers will have to stop work due to prolonged sickness or injury but the number having to take a break because of mental health issues is, sadly, growing. As well as revealing the surprisingly young age of some of their claimants, The Exeter said that mental health-related issues were accounting for a growing number of its claims; reaching 10% in 2018.
The Association of British Insurers (ABI) had previously reported that mental health was the most common cause of claim on income protection policies in 2017; perhaps unsurprising given that one in four of us in the UK will be affected by a mental health problem in any given year.
Whether your reason for claiming on your income protection policy is physical or mental, having cover in the first place is crucial – especially if you have a mortgage or people who rely on your income.
Income protection tips
Check if your employer provides cover as part of your employee benefits. If so, how much do they provide and for how long?
If you need to take out separate cover, don’t leave it too long; the younger you are, the cheaper the policy.
Make sure the cover you take out complements your existing cover. For instance, if your work policy ends after six months, choose a six-month deferred period.
If you’re self-employed, you might consider a shorter deferred period since you’ll have no employer’s cover. You might have savings that could see you through the first few weeks or months of being unable to work.
If you’d like to find out more about the features and benefits of income protection, please get in touch.