UK Income Protection Insurance

While not strictly about healthcare insurance per se, Income Protection (Also known as Permanent Health Insurance) is something that should be considered by individuals and families who work for a living and cannot afford to lose one or two family incomes.

What is Income Protection? Income Protection is a form of insurance used to protect your income should you become unable to work due to sickness or injury. Why do i need it? We insure our cars, homes and even our holidays! The one thing that pays for all of those is your income / paycheque. Insure your income!

The majority of people believe that there are federal, provincial or “state benefits” that will help if you are unable to work. This may be true, however it is limited assistance, at best. In the UK, state benefits will pay out around £90 per week - which equates to around £4,700 per year. In order to qualify for this assistance, you will be subject to a series of tests for which you will be graded; which means you are not guaranteed to receive this benefit. Income Protection will cover up to 65% of your gross income. For a modest income of £20,000 per year, this means you would receive £13,000 which is nearly 3 times as much as UK state benefits. This, in most cases is based on you being unable to do your job, which means it is much easier to make a claim unlike State Benefits.

According to Liverpool Victoria the average claim for income protection is 7 years! It’s a frightening thought that without Income Protection you could be relying on government support paying less than £5000 per year. Extra Benefits can vary from insurer to insurer. Some insurance companies will pay you an additional financial benefit to help you pay for physio, or to see a medical specialist if the NHS has a waiting list. This in turn can help you return to work quicker.

Other insurance companies have dedicated telephone support teams. These people can offer services such as helping you with what additional State Benefits you are entitled to, or speaking to a psychiatrist if you are feeling overwhelmed, stressed or depressed. Some offer additional payments if you spend a certain length of time in hospital - this can help your family pay for parking and related expenses at hospitals (which can be very expensive) or if you are in a hospital away from home, it can assist with hotel costs avoiding lengthy commutes.

All of these extras, which may seem small have all been accessed and appreciated by the families and individuals making income protection insurance claims.