Products - Income Protection Planning

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Income Protection

Income protection is an important part of your financial provision, whether or not you have dependents, a mortgage or other financial commitments. Many people insure against their death with life insurance or take out mortgage protection insurance but statistically there is a much greater likelihood that you will suffer an illness or accident which could stop you working for a long time. Whilst life insurance will give your dependents and income or lump sum if you die, Income Protection offers security in the more likely event that you survive an accident or illness, but cannot work.

Income protection works by paying you an income, usually equivalent to 50-60% of your normal salary. The income is generally paid until you reach your usual retirement age, but will automatically stop if you return to work. If you are self-employed, the income paid under the insurance is normally calculated on the amount of your taxable income, or profits, during the 12 months or 24 months period prior to you becoming unable to work. This income is tax-free.