Income Insurance Benefits

Every prudent financial consumer has always been aware of the need to protect their income – from new graduates just settling into their first job to middle-aged professionals, comfortably nestled into the upper echelons of their company hierarchy. Yet, however much scrimping and saving you might do to ensure that you have something to fall back on should you be out of work, times of economic uncertainty often make it necessary for you to have an extra form of security.

Income insurance, despite having been sold for many years in the UK, is now coming into its own as fears over the country’s economy intensify and redundancies soar. As a result, many people are turning to income insurance – and other payment protection plans – as a way of ensuring that they have an added financial security net, should they happen to be made unemployed. But what exactly is offered by income insurance policies and how do you know if they’re right for you?

Explaining income insurance

An income insurance policy provides you with monthly payments to sustain your income, should you happen to made unemployed due to redundancy, accident or illness. Often, income insurance is sold as part of a larger payment protection insurance portfolio, including mortgage protection and credit insurance plans.

Effectively, mortgage protection should help you keep up with your mortgage repayments and credit insurance lets you keep on top of any debt payments that need to be made. Income insurance, on the other hand, lets you take care of other essential payments, like food and utility bills. Some payment protection policies also include lifestyle cover, so you’ll still be able to afford life’s little luxuries – including digital television packages and broadband internet – while you’re unemployed.

Fundamentally, a comprehensive income protection policy – together with associated payment protection plans – should let you roughly maintain the standard of living you enjoyed whilst you were employed, something that regular state benefits are unlikely to do. However, it’s important to remember that there some restrictions on how income insurance works.

For starters, most policies won’t pay out for the first month you’re out of work, and the majority are likely to offer you support for just 12 months. In addition, income payment protection plans will only cover involuntary redundancy – so if you’ve opted for a redundancy package from your former employer, you may not be eligible to make income insurance claims. Moreover, there should be no foreseeability of redundancy when you take out your income insurance policy – if you’re already on the verge of losing your job, your cover is likely to be void.

Finding the right income payment protection plan

If you think income insurance could provide you with just the financial security you’re looking for, make sure that you don’t simply choose the cheapest policy you can find. With the help of insurance comparison websites like ours, you’ll be able to compare income insurance quotes and cover details with ease – so, with a few clicks of a mouse, you’ll be able to find the payment protection option that best suits your budget and your long-term needs.