Income Protection

Accident and sickness

Income Protection Insurance (IPI) pays out a regular tax-free income if you are unable to work as a result of an accident or sickness. The purpose of the cover is to provide you with a replacement income to cover the basic essentials without you having to dip into your savings. The policy will continue to pay you until you are able to return to work and you can make multiple claims over the life of the policy. There is usually a deferred or waiting period attached to the policy which is the period from which you are unable to work to when payment commences. Waiting periods can range from weeks to months depending on how quickly you want to money to be paid to your account.

Accident and unemployment

Accident, Sickness and Unemployment (ASU) insurance is a type of general insurance that can provide a monthly income if the insured is unable to work due to an accident, illness, or, often as an optional extra, unemployment. Although similar in some respects, it is not to be confused with income protection, which can offer far more cover and for a much longer term. There are important differences between these products, the most obvious being that ASU will only pay a percentage of your income for a limited period of time – usually for 12 months. In contrast, income protection insurance will pay out for as long as one is unable to work (up to the policy expiry). Similar to IPI, ASU is suitable for most people in employment but is essential for those who are self-employed.

Unemployment only

Redundancy cover provides a short-term protection for your income for up to 12 months if unable to work due to involuntary redundancy. If you are worried about what would happen if you lose your job, unemployment cover can give you that peace of mind knowing that should you be made redundant, part of your income will be available to you for a set period of time. It can help to cover your outgoings while you search for a new job. The policy will not pay out for any unemployment that you were aware of at the start of the policy.

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