Income Protection provides a tax-free replacement monthly income if you are unable to work due to illness or injury. Whether you are a single parent or a couple with a sole breadwinner, you and your family’s existing and future lifestyle depends on your income. For example, if you cannot work, you are likely to deplete your savings and struggle to pay your mortgage payments, car loans, household bills and everyday expenses. In this case, after the single parent’s 6-month sick pay arrangement from work has finished, her Income Protection policy would start paying £2,250 per month tax-free until she is ready to return work, or if she could never work again then up to age 65. She has peace of mind knowing that there is income coming in so she can take time to fully recuperate, without rushing back to work.
Tip: for more comprehensive protection, you should choose an “Own Occupation” definition so that the policy will pay out if you cannot do your own occupation. The longer the deferred period, the lower the cost for policy, and vice versa.
Disclaimer: These case studies are for generic information only and should not be construed as personal financial advice.