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PROVIDING YOU WITH THE UK’S LOWEST COST QUOTES FOR INCOME - MORTGAGE PROTECTION AND ACCIDENT SICKNESS AND UNEMPLOYMENT COVER CALL 0800 111 666 1 NOW Income protection is payable when the person covered by the policy becomes unable to work due to sickness, or incapacity due to injury or disability or in certain cases is made redundant All income protection policies will have a deferral period that you choose. This is the length of time that you have to be out of work before benefits become payable. The standard deferral periods you can choose from are 4, 13, 26 and 52 weeks.
You are classed as disabled, sick or injured if you are unable to go back to the type of work that is covered by your policy. The four most commonly used are: Own job. The same job within the same company.
Own occupation. The profession or occupation that you worked in before the enforced absence.
Suited occupation. A suited occupation is one that may require a similar level of education, training, or experience. Any occupation. As it says, really. To fit this bill you have to be considered as totally unable to perform any occupation whatsoever.
Here are some facts that add weight to the argument that this type of protection is an important and useful guard against unfortunate eventualities: 90 families a day had their homes repossessed in 2005. The majority due to the financial problems associated with unemployment. One in three people have experienced unemployment for a period in excess of one month. Almost one in five working age households (3.4 million) have someone who is currently unemployed. Today in Britain there are almost 1,000,000 persons who are registered as unemployed. Every day 500 people in the UK become unemployed. 60% of unemployed men and 45% of unemployed women will be out of work for six months or more. Every adult in Britain is five times more likely to suffer a serious disability than die before the age of 60. Today in Britain, 2,900 people will start claiming state disability benefits. 1,800,000 people in Britain are already disabled and have been unable to work for 12 months or more.
Costs of cover  The cost of your income protection will depend on a variety of factors:
The annual level off income you need it to provide. This can range from 50% to 65% of your previous year’s income.
The length of time you need it to pay out for. Most policies will pay out for a fixed term (the cheapest), until normal retirement age, or for the rest of your life (the most expensive).
Age. The older you are, the more you are likely to pay. You will not normally be able to get cover beyond normal retirement age.
Sex. Believe it or not, women are statistically much more likely to be off work due to illness. Therefore, if all else is equal a woman’s premiums are usually higher than a man’s.
Occupation. People who work in extremely stressful or dangerous professions such as firemen may have to pay higher premiums.
Health and medical history. Sometimes you can be refused cover if you have pre-existing medical conditions.
Whether you smoke. With the exception of one major provider, almost all insurers will charge a higher rate to give cover to a smoker than a non-smoker.
The deferral period. The selection of deferral period can have quite an effect on the price of the policy. Obviously, a long deferral period means that the company is less likely to pay out, so the policy is cheaper. If you have a deferral period of 4 weeks, then there is a reasonable chance that you will have several periods of 4 weeks out of work through illness before you retire or terminate the policy. This will make it more expensive. Definition of disability. The more specific the cover, the more expensive. In other words, if you want to be covered for any injury, illness or disability that will prevent you from going back to the exact same job, you will have to pay more for it. Being unable to perform any sort of job whatsoever is less likely, so it is cheaper to insure against this.
 Type of premium. A guaranteed premium may start out to be slightly more expensive than a renewable premium. This is because the insurance company is protecting itself against high general levels of future claims from the beginning. Renewable premiums are cheaper at the start, but you may find that your premiums rise drastically to cope with a really bad financial year for the insurer.
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