Income Protection aims to provide you with a regular benefit if you suffer illness or injury leading to a loss of income. Your benefit can replace lost earnings, help maintain key expenditures or, if you don't work, it can meet additional expenditures. It offers the choice of how soon you want the benefits to be paid to take account of the income from your employment. It will provide cover for the duration of the contract no matter how many claims you make. Under current legislation the benefit is paid to you tax-free.
What is Income Protection?
The plan is usually designed to replace up to 60% of your income in the event of unexpected sickness or accident. Cover will start after one month of the policy commencement. Then, if as a result of illness or injury you are unable to work for more than three consecutive days, the benefits of the policy will be paid from the first day of incapacity unless you have chosen to defer the benefits for either 1,4,8,13,26, or 52 weeks.
You have the option to choose the type of cover in accordance to the job you are doing and skills you possess. Under ‘own occupation’ you will qualify for benefit if you are unable to perform your own occupation, whereas under own/own suited occupation benefit will cease after 52 weeks if you are able to carry out some other occupation to which you are suited by training, education or experience. The option will be made at the outset of your policy, depending on your own circumstances.
Potential Optional Benefits
If you have no company/employer sick pay benefits then this option can pay out from the first day of incapacity in the event of an accident, which results in more than three consecutive days off work.
To ensure your benefit retains its value you can opt to have your cover increased automatically once a year in line with the Retail Price Index. This means that your benefit increases in line with inflation, thereby keeping its purchasing power and worth.
Terminal Illness Cover
This is included in the Standard Plan and would pay out up to six months sickness benefit plus any credit standing to your name, if you were diagnosed with a terminal illness during the term of the plan. Terminal Illness is defined as advance or rapidly progressing incurable illness where, in the opinion of an attending consultant and the insurance companies chief Medical Officer, the life expectancy is no greater than 12 months.
Fracture and Hospitalisation Benefit – NEW BENEFIT
We are always looking to improve the range of benefits and service we provide to you. We are happy to report that we can now offer:
Fracture Benefit – pays £1,000 if you suffer a fracture to one of the following bones; skull, eye socket, cheekbone, jaw, collar bone, shoulder blade, breast bone, upper arm, ribs, vertebra, forearm, hip, wrist, hand, upper leg, knee, lower leg, ankle and foot. This is subject to a maximum of one claim per accident / incident, within any 12 month period. Fracture Benefit is only payable on comminuted, complicated, compound, depressed and simple fracture types.
Hospitalisation Benefit – pays £50 per night following three consecutive nights in a hospital as a result of illness or injury. Payment is backdated to the first night’s stay. This is limited to a total of 21 nights in any 12 month period.
The combination of Fracture & Hospitalisation Benefit is available at a special rate when included within a Income Protection Plan.