Income Protection Insurance

What is this?

Income Protection Insurance is a policy which is intended to pay a regular sum to the insured on diagnosis of a disabling illness or injury if this occurs within a specified term. The term may be for any period up to the age of 65 and the policy will pay out at any time within that period as long as premiums have been paid on time, the policy terms have been complied with and the disability continues.

Who is it for?

Income Protection Insurance policies are used as a means of ensuring a continuing income following diagnosis of a disabling illness or injury to one of the borrowers. With advances in modern medicine, it is now very likely that you could survive an illness or injury that, several years ago, would have been fatal. However, these illnesses or injuries could severely disable you and prevent you from earning a living. It is also likely that you would require care for the remainder of your life. If a couple take out a mortgage together, based on joint incomes, it would be difficult or impossible for one partner to maintain payments following the disability of the other partner. Even if a Critical Illness Insurance policy had been used to pay off the capital balance, the costs of ongoing care are likely to exceed the earning capacity of the remaining income earner.

Who is it not for?

There are age limits beyond which Income Protection Insurance is not normally affordable. Also, this insurance is not available beyond the age of 65. It is not usually possible to arrange Income Protection Insurance for applicants with life-threatening illness or conditions or in some professions. Alternatively, certain pre-existing conditions may be excluded from the insurance policy.