Everyone has an opinion regarding insurance. Some scoff at the very thought, while others play it safe to the point of shoeboxes full of receipts and categorical coverage. In a country where most fall into the former category, income protection tends to go unnoticed. We’re more likely to insure our cars than the income we use to buy them. 

As a broker, what should you be made aware of regarding income protection insurance? A good start is what it is designed for. Income Protection provides temporary cover for when you are prevented from working due to injury or illness, so that you may continue your daily expenditure as you recover.

Most standard policies cover up to 75% of your gross wage for a maximum period of time, or until you can return to work. The maximum benefit period may be for a length of time or until a certain age is reached.

It is worth remembering that income protection policies require a waiting period before any claim can be made. Usually, the minimum waiting period is 2 weeks, which means it will be more expensive than a longer waiting period.

Income Protection Insurance cannot be claimed in the case of redundancy or voluntarily leaving work. Similarly, it does not cover pregnancy or pregnancy-related conditions such as back pain or post-natal depression. It is exclusively for an illness or injury that prevents you from working. Although less relevant to white-collar workers, income protection can also be provided if you are entitled to workers’ compensation, as income protection covers injury in the workplace as well as outside of work.

Income Protection Insurance is worth considering if you, or others, are reliant on your income. You could also be swayed by the optional benefits that can be included in policies, such as elective surgery or counseling benefits. Other things to weighin on include your age, your smoking status, and your overall health. All things considered, we can’t always be certain when injury or illness may occur, so it is reassuring that insurance policies such as Income Protection exist.

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