A monthly premium is paid and if you are unable to work, you will receive monthly payments to act as a replacement for your income while you are out of work.

While short-term policies will usually only pay out for one or two years, long term will provide the income until you are well enough to work or at least until your policy ends. However, unlike short-term, long-term policies generally won’t justify unemployment as a reason to be unable to work.

Money is paid out at the end of the deferred period. The deferred period starts on the date when you are first unable to work and is a specified duration thereafter. If you are unable to work at the end of the deferred period time then you will start receiving your payments. Deferred periods can vary and can be chosen by you as part of a policy plan.

The deferred period is the time you’d have to wait before the policy kicks in and starts delivering. It makes sense to arrange for the policy to start paying out when your employee sick pay stops – you’ll need to check your contract, as this will vary between employers.

It’s worth remembering that the longer the deferred period, the lower your premium will be.

That depends on how much you earn and which premium you choose. In many cases you can insure a set percentage of your pre-tax earnings. This can be as high as 70% but could be lower if you’re a high earner.

Think about how much you want to protect. As a minimum you’d want to cover your essential monthly outgoings – rent or mortgage payments, household bills and any debts – plus an allowance for everyday spending.

Guaranteed policies are initially more expensive than reviewable policies, but they potentially work out more cost effective. Guaranteed policies ensure that your premium paid each month remains the same unless you wish to increase the amount of cover you want. Alternatively, a reviewable policy provides more flexibility. The policy is reviewed on a regular basis allowing you to increase or decrease the amount of cover you’re receiving due to your current health or age for example.

No, the difference is that income protection provides you with a tax-free proportion of your income if you are unable to work due to injury or illness. On the other hand, PPI covers payments that are on loan or part of a credit card if the policy owner is off work.

Income Protection starts paying out after you have signed off work by a doctor. Because you are far more likely to be unable to work due to illness than to die, Income Protection is more important to have than life cover.

Don’t confuse proper Income Protection with lesser types of policy sold under similar names.

These never pay out for more than two years – and usually not for the conditions most likely to cause you to be off work.

Speak with an Adviser and we’ll find the best cover for you.

Income Protection will replace part of your income if you’re unable to work due to ill health. It covers essential outgoings and provides for your family. You might want to consider unemployment protection too.

You can choose a policy that should be built around your own individual circumstances. Some people want to cover as much of their income as they can, others just want to protect mortgage payments. You can choose how long your plan stays in place, and how long each claim pays out for, too.

Yes. Even if you have difficulty proving your income there are options available.

I’ve heard bad things about PPI. How is Income Protection different?

Income Protection works very differently to PPI cover – they’re completely different policies. PPI will cover debts that have been insured, Income Protection provides you with a tax-free income.

You very rarely need to: because insurance benefits are paid tax-free, there’s no income tax to pay, you might also be entitled to benefits or aid to help make up the shortfall.

State benefits are low, often means tested and may only pay if you’re very severely impaired. An Own-Occupation protection policy pays out if you’re unable to do your job – and will continue to pay out until you’ve recovered or reach retirement age.