Protect your family with income protection insurance

You don’t need me to tell you that your income is super important. You never really expect it to be compromised or taken away from you but the truth is that anything can happen, and none of us are invincible. If COVID-19 wasn’t enough reason to take out insurance to protect your income, being a parent with little ones to provide for certainly should be. 

All life insurance is important, but income protection insurance is arguably the most important cover. Think about it – you are more likely to be off work sick or injured than you are to pass away before retirement. How would you cope if you couldn’t bring in enough money to keep your children comfortably fed and clothed? How would you cover the rent or mortgage payments? 

Income protection insurance 

Income protection insurance does what it says on the tin – it protects your income. It enables you to pay your bills and provide for you and your loved ones if something happens and you become too ill or injured to go to work, providing between 50-70% of your salary.  

When you take out an income protection insurance policy, you can build it around your own circumstances. You can cover as much of your income as possible, or just enough to protect your rent or mortgage payments – it’s totally up to you and how much you want to spend per month in premiums. The more of your income you choose to cover, the more expensive your premiums will be.  The cost of your premiums will also depend on your lifestyle, age, job, hobbies, current health and medical history. 

Once you claim on your policy, you will encounter a deferral period. This is how long it will take between you making the claim and beginning to receive your payout. The longer the deferral period is, the cheaper the premiums will be. When your payments do kick in, they will continue until you either recover and return to work, retire, or pass away – whichever comes first. 

Income protection insurance for the self-employed 

There’s a good chance that many people reading this will be self-employed. If so, income protection insurance may be all the more important for you than anyone else. When you are self-employed, it’s all on you to bring in the money, so when this is unexpectedly taken away from you, you don’t have an employer to fall back on to help you through hard times. 

 You could pin your hopes on qualifying for Employment and Support Allowance, which is financial support from the government if you are unable to work due to illness or disability. Although that option is available, you’ll be provided with much more money if you claim on an income protection policy. You may want to factor income protection in as part of your business plan, so that you don’t have to worry about your family getting by without your income.  

And there’s no need to panic about the process of taking out income protection insurance when you are self-employed. Your monthly income will be based on your share of the pre-tax profits generated by your business. The amount of cover that you’ll need will depend on the size of your mortgage and whether you have taken out any loans to build up your business. Even if you anticipate having some trouble proving your income, there are plenty of options available. It’s a good idea to enlist the help of a broker who will be clued up in helping people in situations such as yours. 

When you become a parent, the world feels different. You have a little life to look after and provide for. If becoming seriously ill or injured means that you can’t do this, it’s important to put provisions in place to protect the life you love – and income protection insurance is the perfect way to do this.