Income protection plan sounds great any way you look at it. Being a UK citizen, you can opt for this insurance and keep your fingers crossed for a stress-free future. But there are still things about this insurance that you may not want to hear, but we would still offer to tell you about it.
Here’s what you know about income protection plan so far that keeps your world humming on a positive note, because it’s there.
Income protection plan provides payments on a regular basis in case there comes a day that you are unable to work due to some illness, or god forbid an accident. You keep getting the payout until you start feeling better and begin to work again.
This payment can even continue till your retirement, your demise or the policy term reaches its end; whatever happens sooner. This coverage gives you protection for most illnesses that stop you from working — either short term or long term. The operative word here is ‘incapacity’ and how it is defined in your policy.
You can claim income protection insurance multiple times till the policy is in force. But, this policy is not like critical illness insurance that pays a one-time lump sum.
There are all facts about income protection cover that you already know.
Now allow us to mention a few points about this policy that you may not like to hear about.
What you don’t want to hear about income protection plan
1-The amount of income you get to claim does not replace the total money you were earning before life happened and you had to stop working. What you can really expect to get is about half or two-thirds of what you earned from that job that supported you. And this amount will be the sum before tax that you got in your job.
2-You had better be very honest about your health problems and medical history. Any health information that your insurer asks for, you need to give. If you are not accurate in filling those boxes of information in your application, or you did not disclose something, then there is a good chance you might not get the required payout.
3-You cannot claim income protection payment immediately if you become ill or face some disability. There is a minimum wait period of four weeks.
4-There are different types of illness insurance covers available in the market. What you need to do is sit down seriously and compare your income protection insurance with those insurance policies. Only once you are convinced that ‘yes’ income protection coverage definitely suits you more, then you should buy it.
5-The cost or premium of an income protection policy is high. Plus, you may never even need to make any claim. And what goes down to the wire is that you don’t get any money back, if a claim has not been made from your side.
We didn’t want to burst your bubble about this insurance policy. But then we thought it is better to paint a clear picture for you.
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