Income Protection Insurance for the Short and Long Term
Article published on 10th March 2015
Income Protection Insurance provides a monthly income in the event that you are unable to work due to an accident or significant illness. It is possible to include involuntary redundancy on some policies depending upon the options that you go for.
Income Protection Insurance is available in two primary forms: long term and short term Income Protection. Short term Income Protection Insurance provides a monthly benefit of between 12 and 24 months if you are unable to work and a valid claim is accepted by the insurer. A long term Income Protection Plan can provide you with a monthly income replacement until your anticipated retirement age (50 to 70 years old).
Which Income Protection Insurance policy is right for me?
Short term Income Protection Insurance can be applied for and accepted relatively quickly as there is no underwriting process to go through; applying for short term Income Protection Insurance can usually be completed and accepted within a day. At the point of a claim the insurer will likely write to your doctor to establish a clear picture of your medical history and will typically exclude any claim relating to pre-existing medical conditions. These short term policies do not take factors such as your occupation, smoker status or health into account when you apply for the policy, which may mean that the monthly premiums are cheaper with this option.
When you apply for long term Income Protection Insurance the policy will need to go through an underwriting process which will review such areas as your smoker status, occupation, foreign travel, hazardous pastimes and your medical history. A long term Income Protection Plan may take a couple of weeks to be fully completed with the insurer if they require a report from your GP. There is an advantage to this, in that you can be assured that the insurance provider will have a clear understanding of your health when you offered policy terms. If in the future you do place a claim on your Income Protection Plan you will then have the comfort of knowing that the insurer is already fully aware of your medical history. With long term Income Protection you may find that your policy is offered at special terms that could include exclusions based upon claims related to your medical history and/or any hazardous sports you pursue. Whilst this type of plan is usually more expensive than short term options, you have the potential of a much longer claim period on the policy with many choosing terms that offer monthly income protection up to retirement age.
Income Payment Insurance – Is it worth it?
This is a 'how long is a piece of string?' type question. Income Protection Insurance is a valuable policy if you feel that yourself and/or your family would struggle to pay your bills and maintain your current standard of living if you are unable to work. Long term Income Protection Insurance provides the security of knowing that should you fall seriously ill, a valid claim will result in you receiving a monthly income replacement up to your retirement age. Short term Income Protection Insurance can provide some financial security for the immediate future and can be an easily affordable policy until you are able to return to work. We would recommend that you consider long term Income Protection Insurance in the first instance and then consider short term policies if long term policy options do not suit your circumstances.
When applying for either of these types of policies you will need to consider your health, maximum monthly replacements available to you and the amount of time that you could wait until the policy paid out (deferment period). Our insurance advisors regularly arrange Income Protection policies for clients with a varied range of individual circumstances and will happily review your situation for you.
In order to get an Income Protection Insurance Quote Online, please visit our Income Protection Quote page, or please feel free to contact one of our friendly advisors for financial advice on Income Protection Insurance free on 0808 17 82 777.
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