Have you considered what would happen if you couldn’t work due to an illness or an accident?
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If you are employed, how long will your company continue to pay your salary?
If you’re self-employed, do you have emergency funds to access?
What about long-term, where you cannot go back to your current occupation?
Can you survive on statutory sick pay, currently £85 per week?
A solution is Income Protection Insurance (IPI)
How does it work?
IPI is a policy provided by a range of life insurance companies which will protect up to 66% of your gross income if you are unable to work due to illness or accident.
You can determine the term of the plan but it is generally advisable to tie it in with your normal retirement age i.e. 65.
The deferment period or ‘length of time before the plan kicks in’ can range from 4 to 52 weeks.
The income you receive from the plan is tax free.