Income Protection
Safeguard your most valuable asset, your income. Income protection insurance replaces a portion of your earnings if you're unable to work due to illness or injury.
GET A QUOTEWhat is Income Protection?
Income protection insurance provides a regular, tax-free monthly payment if you're unable to work due to illness or injury. Unlike critical illness cover which pays a one-off lump sum, income protection replaces a portion of your salary, giving you ongoing financial support until you recover, reach retirement age, or your policy ends.
It's designed to cover your essential outgoings including mortgage or rent, household bills, food, childcare and other daily living costs, so you can focus on getting better without the added stress of financial worry.
How Does Income Protection Work?
You choose the level of cover, the waiting period before payments begin, and how long you want the policy to last. Here are the key features:
Deferred Period
The waiting period before your policy starts paying out. Common options are 4, 8, 13, 26 or 52 weeks. A longer deferred period reduces your premium, so it's important to consider any employer sick pay or savings you can rely on.
Benefit Amount
You can insure up to 60-70% of your gross pre-tax income. The payment is tax-free, so it often closely matches your take-home pay. Some policies also cover pension contributions and National Insurance.
Long-Term Cover
Typically income protection pays out for 12 months, 24 months, or until the end of the agreement, set age or number of years.
Who Needs Income Protection?
If you rely on your income to pay bills and support your lifestyle, income protection is worth considering.
Employees
Even with employer sick pay, most companies only cover a limited period. Income protection bridges the gap and provides long-term security if you can't return to work.
Self-Employed & Contractors
Without employer sick pay or statutory benefits, you're entirely reliant on your own earnings. Income protection is essential if you're self-employed.
Company Directors
Protect your personal income and ensure your business continues to function. Executive income protection can be set up tax-efficiently through your company.
Homeowners
Ensure your mortgage repayments are covered if you're unable to work. Income protection provides ongoing monthly payments, unlike a one-off lump sum.
Parents & Families
With dependants relying on your income, income protection ensures your family's day-to-day living costs are covered during a period of illness.
High Earners
The more you earn, the more you have to lose. Income protection can cover a significant portion of high incomes, protecting the lifestyle you've built.
Why Income Protection Matters
Tax-Free Payments
Your income protection benefit is paid tax-free, so you receive the full amount each month.
Long-Term Security
Payments can continue until you recover, retire, or the policy ends, not just for a few months.
Mortgage & Rent Cover
Keep up with your housing costs so your family can stay in their home.
Focus on Recovery
Remove the financial stress of being off work so you can concentrate on getting better.
Career Flexibility
Some policies pay out if you can't do your own specific occupation, not just any job.
Guaranteed Protection
Your insurer can't cancel your policy, even after you've made a claim.
What to Consider When Choosing Income Protection
Choosing the right income protection policy involves understanding a few key factors. The right combination will depend on your personal circumstances, employment, and budget.
Key factors to consider include:
- Your current monthly outgoings and essential bills
- Any existing employer sick pay and how long it lasts
- The deferred period that suits your financial situation
- Whether you need 'own occupation' or 'suited occupation' cover
- How long you want the policy to pay out
- Whether to index-link your benefit to keep pace with inflation
Our advisers will help you navigate these decisions and find the right policy for your circumstances and budget, including how it fits with other protections like life insurance.
Why Choose Elective Health?
Income protection can seem complex, with different policy types, deferred periods and definitions to navigate. Our independent advisers simplify the process and find the right cover for you.
- Independent, whole-of-market comparison
- Free expert advice. No cost, no obligation
- Deal directly with Kingsley and Louis. No call centres
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- Ongoing support from initial setup through to renewal
- Specialists in personal, business and executive income protection
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