Income protection insurance provides a tax-free monthly income if you cannot work for an extended period due to serious illness or injury. It is a valuable financial safety net to have in place, as statutory sick pay from an employer is limited to 28 weeks and may not be equivalent to your total earnings. Self-employed individuals may not have any income if they cannot work.
When choosing income protection coverage, you can choose the benefit payment period, ranging from a few years to up to your retirement age, and the waiting period before receiving the first monthly payment, which can vary from a few months to two years. You can also choose between level cover, where the monthly payment amount remains fixed, or inflation-linked cover, which increases in line with the Retail Prices Index. Premiums can be guaranteed or renewable, depending on your needs and preferences.
There are also options such as life insurance, which pays out a tax-free lump sum or income upon your death, and critical illness insurance, which pays out a lump sum if you are diagnosed with a life-threatening illness.
Picking the right income protection plan can be complex, considering various factors. Our PIWA advisers have the knowledge and expertise to help you understand the options and find a plan that meets your needs and budget.