Income Protection Insurance

There are statistically greater risks of illness and accident in certain proffessions. Recently it was found that window cleaners where posing such a big risk of falling off ladders to insurers that it resulted in sky high premiums threatening to kill off the seemingly harmless occupation of cleaning the nations windows.

The whole point of taking out an income protection plan is to insure that an income of sorts is paid in the event of illness or injury. Most people can take out a plan it is just question of how many restrictions there are on the policy and the cost of the monthly premiums.

The plans work by usually paying an income equivalent to 50 - 65% of the usual salary. The mony is usually paid out until the termination of the policy which could be before the date you are due to retire. If you are self employed then the benefit is calculated by basing the amount on taxable income accumulated over a period of time, usually 12 months before you are unable to work. Any income from an insurance plan will be taken into consideration when applying for state benefits.

There are some points to note when taking out a policy.

• When does the policy expire is it for a fixed term or throughout the remainder of your life?
• Are the benefits index linked?
• Are the premiums fixed throughout the term of the policy?
• Deferral periods: these represent the time periods that you must be away from work, due to illness or disability before the benefits under the policy may be claimed. Deferral periods range anything from 1 day to 12 months. Generally the longer the deferral period the lower the premiums to the policy will be.

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Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.

Best UK Loans is a trading name of Grovelawn Limited, who are directly authorised and regulated by the Financial Services Authority.
Registered Address: 98 Station Road, Sidcup, Kent, DA15 7BY; FSA Registration Number: 314204