
Income Protection
Income protection is a type of insurance designed to provide financial support if you are unable to work due to illness or injury. This insurance policy ensures that you continue to receive a portion of your income, helping you cover essential living expenses such as mortgage payments, utility bills, and general expenses while you recover. The benefits typically continue until you are able to return to work, reach retirement age, or the policy term expires. Income protection offers peace of mind by safeguarding your financial stability during periods when you are unable to earn a regular income due to illness or injury.
How does income protection work?
Income protection works by providing you with a regular income if you are unable to work due to illness or injury. Here’s a more detailed breakdown of how it works:
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Policy Selection: You choose an income protection policy that suits your needs. Policies can vary based on factors like the percentage of your income covered, the waiting period before payments begin, and the duration of the benefit payments.
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Monthly Premiums: You pay regular premiums to maintain your policy. The cost of premiums can depend on factors such as your age, occupation, health, and the level of cover you select.
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Claiming Benefits: If you become unable to work due to a covered illness or injury, you can make a claim. You will need to provide medical evidence and, in some cases, proof of income to support your claim.
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Waiting Period: There is usually a waiting period (also known as a deferment period) before the benefit payments start. This period can range from a few weeks to several months, depending on your policy.
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Receiving Payments: Once the waiting period is over and your claim is approved, you will begin to receive regular benefit payments. These payments typically continue until you are able to return to work, reach the end of the benefit payment term, or hit the retirement age, whichever comes first.
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Policy Renewal and Adjustments: Throughout the policy term, you can review and adjust your coverage to ensure it continues to meet your needs. Some policies may also offer inflation protection to ensure the benefit keeps up with the cost of living.
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Income protection provides a safety net by ensuring that you still receive a portion of your income, helping to cover essential living expenses while you recover from illness or injury.
Do I need income protection?
If you’re uncertain about needing income protection, consider how you would manage financially if an illness or injury prevented you from working. Most employers offer support for only a limited time.
Beyond that, without substantial savings, you might have to depend on state support, which often isn't sufficient to cover all expenses. Income protection offers valuable peace of mind by ensuring that you’ll still have an income if you’re unable to work.
How much does income protection cost?
​The cost of income protection insurance varies based on individual circumstances, including the duration of coverage and the level of protection desired. Insurers consider various factors when determining premiums, such as your age, health, occupation risk, and smoking status. Income protection is often paired with life insurance, but standalone policies are also available.
How can Knightwood Mortgages help?
Knightwood Mortgages provides expert advice on income protection cover, guiding you to the right policy that fits your needs. Our experienced advisers will work with you to secure a life insurance plan that offers peace of mind and financial stability. Contact us to discuss income protection policies by emailing services@knightwoodmortgages.co.uk or calling 03301 336045.