How to use income protection insurance

Consumers in the UK are usually very keen to protect themselves financially with some form of insurance cover, and most will take out a variety of insurance such as health cover, dental insurance, life insurance, home insurance, mortgage insurance, and critical illness insurance. However, one for of insurance cover that often gets forgotten about is income protection insurance, and this is a type of cover that could really benefit those that want to protect themselves against the financial pitfalls of job loss.

Of course, there are other types of insurance that can protect certain aspects of your life in the event that you suddenly find yourself without an income, such as mortgage payment protection insurance, which covers your mortgage repayments for a specified period in the event that you are made redundant. However, although this reduces the chances of you losing your home in the event of being unable to meet your repayments for a while, it does not help to put food on the table or pay the bills, which can be just as important.

Income protection insurance is not designed to cover repayments on any particular service or product – it is designed to cover your income in the event that you are suddenly faced with redundancy and need time to get yourself back on your feet and find another job. Loss of a job can occur for a number of reasons, and this includes redundancy, accidents, and illness, both of which can render you unable to work at your particular job. Many people in the UK are faced with redundancy and job loss each day, and for many this comes as a real shock leaving them to stress over how they will pay their bills and feed their families, even if the mortgage repayments are covered.

Income protection insurance is available to those that have a mortgage as well as those that are renting. People that do not have a mortgage do not need mortgage payment protection insurance, but they still have rent to pay, so this form of cover is particularly important, as without an income they could lose the roof from over their heads as well as being unable to pay bills and buy food. Income protection insurance can provide valuable cover and real peace of mind in what has become a very uncertain world when it comes to job security.

No matter how indispensable and secure you feel in your job there is no job that is 100% secure, and you just never know what lies around the corner. Many of the people that lose their jobs unexpectedly each day have no idea what has hit them, and they are left to pick up the pieces and start the search for another job. Although redundancy means that you may receive some sort of redundancy payout this is often only a small amount, particularly if you have not been in the job for long, and it has to last you until you get another job and get paid, which can be a long time for some people.

If you have income protection insurance you won’t have to worry if you only receive a small redundancy payout, as your income – or a percentage of it at least – will be covered and therefore you will need to use very little of your redundancy for day to day costs. If you do not receive any redundancy – for instance, if you have not been at the company for long enough – then income protection insurance is all the more important and could be a real asset to you in these circumstances.

Most of us get so used to the mundane things that we spend our salaries on each month we tend to take everything for granted. However, imagine if you weren’t able to pay your utilities, bills, and pay for your shopping each week or month. Even if you have loans and credit cards with payment protection taken out individually, you will still have to find money for the basics and these are often the most important things that you cannot do without, such as heat, electricity, and food.

You will find a number of insurance providers that are able to provide income protection insurance, and the cost of this cover can vary depending on the level of income that you want to insure and the provider that you go through, as well as other factors. It is important, as with any type of insurance cover, that you shop around in order to find the best deals, as the premiums can vary quite widely from one provider to another. However, do make sure that you read the small print and check on exclusions and restrictions before you make any firm commitment.

Income protection insurance can provide valuable peace of mind to anyone that has become reliant on their salary in order to pay for their bills, groceries, and other outgoings, and can help to ease the stressful situation of job loss, giving you valuable time to look for alternative work without having the added worry of trying to cope financially.