New figures from technology provider Iress5, show income protection sales via its software increased 50% in the first quarter of the year. This is heartening news and shows that more people are aware that they need to protect their financial future by putting plans in place that could be a lifeline if the unexpected should occur.
INCOME PROTECTION POLICIES
Whilst you might have enough funds to tide you over for a short time, you could soon find that paying the household bills was a struggle. These policies are designed to pay out if you’re not able to work and earn money due to illness or injury, and, in some cases, forced unemployment.
The maximum amount you can claim is usually your net monthly earnings after tax, minus any state benefits you may receive. This could be around 65% of your gross earnings and it’s usually tax-free.
Policies pay out following your chosen deferred period, typically between four and 52 weeks, and can continue until you return to work, or the policy expires at the end of a fixed period.