With vulnerable people missing out on disability benefits because of a flawed testing system, experts are urging UK workers to invest in income protection to protect their salary against illness and incapacity.
People who are unable to work because of illness or disability can apply for Employment and Support Allowance (ESA) by undergoing a Work Capability Assessment.
However, a new report by MPs has criticised the assessment process, saying it causes “misery and hardship” to a number of people who are unfairly refused benefits.
According to the report, there has been an 83% increase in the number of people asking for support in appealing against the Assessment decision. And in over a third of appeals, the initial decision has been overturned.
Critics say that the assessment process fails to account for rare, variable or mental health conditions, leading to inaccurate decisions being made for the most vulnerable claimants.
Dr Richard Theo, of insurance comparison website http://www.activequote.com/income-protection/, believes that many UK workers could benefit from an income protection policy, to ensure that they remain financially secure if they are unable to work because of long-term illness or injury.
He said: “Income protection is designed to replace your salary if you cannot work because of a health condition, so you do not have to rely on ESA.
“With this type of insurance, you will receive your benefits until you are well enough to return to work or for a fixed term, which could be retirement age."
“And unlike ESA, which will only pay eligible claimants up to £105.05 a week, income protection insurance can replace up to 70% of your gross income.”
Whilst income protection policies will not pay out for pre-existing medical conditions, this type of insurance could offer additional financial security for employed or self-employed people.
However, Dr Theo does warn that in some cases, ESA will not be paid to people with an income protection policy. He said: “When comparing income protection policies, check to see if there is a caveat in the small print about eligibility for ESA.”
MPs have now called for a full review of the Work Capability Assessment to improve the accuracy of the process.
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