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Income Protection
Income Protection is a very basic form of insurance that will protect your income if you are off work due to an illness or disability.
Imagine a scenario where either you or your partner were to become ill, and you no longer had their income to support your family. This may mean that you are unable to cover your mortgage payments or rent. Covering essential bills on a monthly basis or even putting food on the table may also become difficult.
Most people insure their cars, pets mobile phones but only a very small number protect their income, which is probably one of the most important insurance policies you can have.
What is an Income Protection Insurance Policy?
An income protection policy will pay out a tax free lump sum on a monthly basis for up to 50% of your earnings. The policy will start to pay out after a chosen period in time, which is typically 1 – 6 months, depending on arranged sick pay agreements with your current employer. You will also choose an amount of years to be covered for, this is typically until retirement age or until the mortgage has been paid off.