Income Protection Plans
An income protection plan is designed to replace part of your income if you cannot work because of accident, sickness or unemployment. ActiveQuote's comparison system allows you to compare income protection plans from a range of insurers in less than two minutes, to help you find an affordable policy- you can even buy one of your chosen income protection policies online.
What is an income protection plan?
Income protection plans are chosen by people who are looking for peace of mind against accident, sickness and unemployment. By paying a monthly premium, your income protection cover policy will pay you part of your monthly salary if you are unable to work because of an illness, injury or redundancy.
How much could an income protection policy pay out?
Income protection insurance policies will usually cover up to 70% of your income to a certain maximum limit. This maximum limit will depend on your insurer. The more of your income you choose to cover, the more expensive your income protection cover plan is likely to be.
How long will an income protection cover plan pay out for?
Insurers often define income protection plans as short term or long term. A short term policy will only pay out for a maximum of 12 months, even if you are unable to return to work after this period of time.
A long term plan is able to pay out until the end of the policy term, which is usually retirement age. Long term income protection insurance policies only cover accident and sickness- unemployment cover has to be purchased separately. Long term income protection plans are usually flexible, and you can choose your own benefit period.
Short term income protection policies are not always more affordable- it is worth comparing a range of quotes online to find one that suits your circumstances.
How much do income protection plans cost?
The cost of an income protection insurance policy will vary depending on a variety of factors including your own personal circumstances. Your age, state of health, smoker status and employment status will all have an effect on the premiums.
If you want to lower the cost of your income protection plan there are a few changes you can make reduce the premiums:
- Increase your waiting period: The waiting period is the time between you being unable to work and your income protection plan actually starting to pay you your benefits. Insurers usually offer a range of waiting periods to choose from. The longer the waiting period, the lower your premiums.
- Lower the benefit period: An income protection plan that pays out until retirement will cost more than a policy that pays out for five years.
- Cover less of your income: This will significantly lower your premiums.
- Stop smoking: To be considered a non-smoker you have to have gone tobacco free for a minimum of 12 months, but this will significantly lower your premiums.
Where do I find the best income protection policies?
Comparing income protection plans is the best way to find an affordable policy within your budget. Since there are many insurers in the UK offering income protection cover, it is easier to view the whole market rather than visit each one direct. Luckily, ActiveQuote offers you over 25 income protection policies to compare online, helping you to find one that suits you.