Income Protection
Income protection replaces your monthly income, tax free, should you be unable to work long-term because of illness, accident or disability, either until your retirement age or you return to work. It is an area that remains very under-insured, but it should have as equal importance as life cover.
This simple example will illustrate just how important it is.
Split you finances into four parts – Income, Pension, Savings and Mortgage.
If your income disappears, because of unemployment, illness, disability or accident, you will have to stop paying into your pension as soon as your money dries up.
This will depend upon the policy of your employer – some will pay full pay for a few months, usually a maximum of 6, others statutory sick pay immediately at only £79.15 a week , for a maximum of 28 weeks.
Your savings can be used to pay the mortgage, but when they are used up how will the mortgage be paid?
If you cannot pay your mortgage, you may be forced to either sell your home or suffer a repossession.
So with no protection in place, losing your income can very easily result in you losing your savings and your home.
This can be easily avoided by taking an income protection policy that will replace your income should you be unable to work. You would not consider leaving your family exposed by not having life cover and the same applies to income protection.
Contact us for further advice and illustrations – it is a relatively inexpensive way to protect you and your family.