Each year in the UK, one million workers experience a prolonged period off work due to illness or following an accident*. If this happens to you, or if you are made involuntarily redundant, income protection insurance can be worth its weight in gold until you can work again or until you reach retirement.
Income protection insurance - also known as IPI - provides a tax-free, monthly sum of up to 70% of your income to help you pay the bills and maintain your lifestyle during the time you’re not working. You can take out general income protection cover, which can be used to pay any expenses you choose, or types of cover such as mortgage payment protection insurance, which is used specifically to meet mortgage repayments while you’re not earning.
So, if you find yourself among those one million people who fall ill or are injured, or your employer makes you redundant, just how do you make an income protection claim?
Call your income insurance policy provider
This is the first thing to do, even if your policy has a deferred period. Also known as a ‘wait’ period, this is the length of time you will have to wait before you receive the first monthly instalment. Unless you have ‘day one cover’, which takes effect from the first day you are unable to work, the deferred period is likely to be between one month and a year. However, it’s important to let your insurers know that you are unable to work as soon as possible.
Have your policy number to hand if you know it, or be ready to provide personal details including your full name, address and date of birth so the insurance company can find your policy details. You may be asked to provide contact details for your GP or hospital, as well as information about your illness or diagnosis. If you have been made redundant, you will be asked for your employer’s details.
Your details will be treated in confidence, although the insurance provider is likely to get in touch with your GP or employer to check the facts and request medical documents. You will then be sent the relevant paperwork and / or a claims form, and will need to complete, sign and return it.
Some insurance providers have an early intervention team and your policy might include support services such as physio, counselling and back to work schemes. Find out what’s available to you. You might be fortunate enough to receive employee sickness benefits, otherwise it’s a good time to find out about Statutory Sick Pay (SSP), although even the maximum benefit is unlikely to match your full salary.
Continue to pay your income protection premiums
It may take a while for your claim to be assessed and it’s important not to stop paying your premiums during this time.
It’s also a good time to check your cover so you know what to expect next. You will either have short or long term income protection; a short term income protection policy usually provides cover for between six months and a year and is designed to be a stop-gap until you can work again, whilst long-term IPI protects against the possibility of you not being able to work again.
According to the Chartered Insurance Institute, just one in 10 workers have income protection cover. To make sure you could cope financially should you become unable to work, find out more and compare income protection quotes with Activequote.
You will be asked what type of cover you need, including income cover, mortgage protection or loan or credit repayment cover, as well as details of how long you want the policy to run for. You might find our guide to income protection exclusion clauses useful too, as it can help you ask the right questions about the cover you plan to take out.