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UK income protection insurance, also referred to as payment protection insurance,
or unemployment protection, will cover you for a loss of earnings caused by unemployment,
redundancy, sickness, disability or injury. Income protection insurance is very
similar to mortgage protection insurance but is generally far more flexible as
its benefits can be used for any purpose. If you are unable to carry on working
then your UK income protection insurance will provide you with a liveable income
that you would otherwise be bereft of. Income protection can prevent your house
from being repossessed or you from falling into arrears with your mortgage and
other payments, covering you for up to 75% of your wage if you are rendered unable
to work.
For most UK residents government benefits fall well below the amount that they
would normally require to live on; a good deal less than £100 per week.
There is also a lot of red tape involved with obtaining state aid and you could
be waiting a long time for the money you are owed, and that's if you qualify at
all. A significant proportion of people applying for state benefits are turned
down because they have not contributed enough to be eligible for benefit payment.
Income protection insurance works as a financial safety net to protect you in
such circumstances.
Income protection insurance is available to almost anyone working in the UK,
though in order to qualify you will usually have to meet a certain number of criteria.
You will need to be a permanent resident in the UK and have been in permanent
employment for at least 6 months before you are eligible for income protection
insurance. You must also be in good health and be unaware of any foreseen future
unemployment.
If you add up the amount of money you need to live on every month you might
be quite surprised at the enormity of the bill. In addition to your rent or mortgage
obligations there is also council tax and utility bills for gas, electricity,
water, telephone and your mobile phone. This list excludes food, travel expenses
and any money you might spend on luxuries such as entertainment or clothing. If
you add up the amount of money you spend on living costs every month you will
probably be shocked. Now imagine what you would do without your usual wage to
fund these expenses. UK income protection insurance could help prevent you from
being left out on a limb if the unexpected happens.
Income protection insurance is therefore an important product to be aware of,
especially if you are the main earner for your household. It is, however, rarely
explained in clear terms, with customers sometimes succumbing to the hard sell.
It is in your interest to understand a product before you enter the bear pit of
the insurance marketplace and our site aims to arm you with some of the background
information you need to obtain the right UK income protection quote for your needs.
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