{"id":72083,"date":"2019-05-13T12:07:37","date_gmt":"2019-05-13T12:07:37","guid":{"rendered":"https:\/\/www.templewealth.co.uk\/?p=72083"},"modified":"2019-05-22T20:23:22","modified_gmt":"2019-05-22T20:23:22","slug":"income-protection","status":"publish","type":"post","link":"https:\/\/www.templewealth.co.uk\/income-protection\/","title":{"rendered":"Income Protection – why wouldn\u2019t you want to protect your income?"},"content":{"rendered":"\n

Income Protection, also known as IP insurance, can help financially support you if you are unable to work and suffer a loss of earnings as a result of an injury or illness. <\/p>\n\n\n\n

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When you think about it, the most important skill you possess is being able to work and earn a living to pay for all the nice things in life. Unfortunately, the human body is not indestructible and is prone to getting injured or suffer from various ailments. <\/p>\n\n\n\n\n\n\n\n

If you are unlucky enough to have an accident, or suffer from an illness that prevents you from working for any time up to a year or longer, how will you cope financially continuing to pay for all the bills, mortgage and other ongoing costs that life throws at you?<\/p>\n\n\n\n

Why wouldn\u2019t you want to protect yourself against this situation with Income Protection?<\/p>\n\n\n\n

If you are fortunate enough to have a generous employer with good sickness benefits, who would continue paying you your basic wage for 6 months or so, then that\u2019s good but the majority of employers are not in the position to do that.<\/p>\n\n\n\n

What about State benefits?<\/h4>\n\n\n\n

If you don\u2019t have any Income Protection and you do become injured or ill, before you know it your income whilst you\u2019re unable to work would reduce to the current Statutory Sick Pay (SSP) rate of \u00a394.25 per week, paid for the first 28 weeks that you are not able to work. Beyond this you may qualify for Employment and Support Allowance (ESA).<\/p>\n\n\n\n

For the self-employed the situation is even more\nworrying. If you are one of the many millions that work for themselves and you\nbecome ill or disabled and are unable to work, if you don\u2019t have any income\nprotection in place you will have to look at State benefits such as SSP, or you\ncould qualify for ESA. This would pay \u00a373.10 per week for the first 13 weeks.\nAt this point it would be reviewed and would either remain the same or increase\nto \u00a3100.75 per week if you are unable to return to work. <\/p>\n\n\n\n

What this all points to is that if you simply rely\non the State when you are unable to work, due to sickness or disability, you\nwill suffer a huge reduction in your income. This can quickly begin to cause\nmajor problems paying for even your basic bills, let alone continuing to have\nthe same lifestyle as before.<\/p>\n\n\n\n

This is where Income Protection comes into its own <\/h4>\n\n\n\n

For an amount suited to your budget, you can have\nan income paid to you after you have been sick or disabled and unable to work\nfor a period of time, known as the deferred period. This is normally for 8, 13,\n26 or 52 weeks matching your individual needs. <\/p>\n\n\n\n

An income of up to 60% of your previous earnings can be covered which means it would at least help pay for your essential costs.<\/p>\n\n\n\n

If need be, the Income Protection plan would continue to be paid until you either went back to work or until your chosen retirement age. Potentially, this could add up to many thousands of pounds being paid to you over a long period of time, if necessary, which would not be available to you without having this kind of Income Protection plan.<\/p>\n\n\n\n

It seems strange that most people will buy pet\ninsurance before they even consider Income Protection.<\/p>\n\n\n\n

If you had a machine producing money for you, day\nin day out, you would make sure it was insured. Well, that machine is you but,\nsurprisingly, you never think of protecting this valuable asset against a\nbreakdown or malfunction although you wouldn\u2019t think twice about not protecting\nyour car, for example. <\/p>\n\n\n\n

Some relevant figures to leave you with:<\/h4>\n\n\n\n