Income protection

Safeguard your income

We all like to think nothing bad will happen to us. In reality, protection insurance pays out around £13million each day. This shows how many people can unexpectedly become ill or injured (ABI). At Clever Mortgages, we can help provide the right type of income protection to best suit you.

If you have an accident or minor illness, it could prevent you from working for a period of time. You might have work sick pay or have savings to help you get by, but this is unlikely able to provide the full income that you are used to or be sustainable for very long.

What is income protection insurance?

Income protection helps to replace any income lost in the event that you can’t work due to a minor illness, accident or injury. You can also choose to be covered for unemployment. If or when you make a valid claim, you will receive tax-free payouts to help use towards your financial commitments.

Although you should receive sick pay from your work if you are ill, in most cases this is the only statutory sick rate at just under £90 a week for a minimum of 28 weeks (Citizens Advice). In addition, only a small number of employers will support their employees for over a year due to illness.

What can it cover?

You’ll be asked what you want to protect. This can include your salary, mortgage payments, loan and credit card repayments, or any other financial commitments. You can protect up to 70% of your gross salary. The policy will pay out until you can start working again.

Income protection doesn’t cover life-threatening illness or death. To be insured for this you will need to consider taking out critical illness insurance or life insurance.

Self-employed income protection

Income protection is particularly useful for people who work on a self-employed basis. Without an employer, you won’t be eligible to receive statutory sick pay if you become ill. Instead, you will rely on any savings or your partner’s income in order to get by. If you’re in this situation, income protection can be essential in ensuring you will always have enough to pay your finances.

How much does it cost?

The amount you pay each month will depend on which type of cover you choose, how long you want to be covered for and the percentage of income you’d like to cover. Additionally, your age, job, whether you’re a smoker, family medical history and general health will all be taken into consideration.