Income Protection Advice

When choosing an income protection policy, consider the following key factors:

• Coverage level: Ensure the policy covers a sufficient percentage of your income, typically upto 60-65%. Should you not require the full cover, perhaps due to a high disposable income, you could choose a lower cover value to reduce the cost of the premiums
• Definition of disability: Understand how the policy defines disability and under what conditions benefits are paid.
• Deferral period: Check the waiting period before benefits begin, ranging from 14 days to several months.
• Benefit period: Determine how long the policy pays benefits, which could be a few years or until retirement.
• Premium type: Choose between guaranteed premiums (fixed) and reviewable premiums (can increase over time).

Income protection and life insurance serve different purposes:

• Income protection: Provides regular payments if you are unable to work due to illness or injury, helping you maintain your standard of living.
• Life insurance: Pays a lump sum or income to your beneficiaries in the event of your death, providing financial support to your loved ones.
• Focus: Income protection focuses on maintaining your income during periods of ill health, while life insurance focuses on financial security for your dependants after your death.

Income protection policies will be medically underwritten may providers may place exclusions on your insurance such as:

• Pre-existing conditions: Illnesses or injuries you had before taking out the policy may be excluded.
• Certain medical conditions: Some policies exclude specific conditions like mental health issues or back pain.
• Risky activities: Injuries resulting from high-risk sports or activities may not be covered.
• Substance abuse: Disabilities arising from drug or alcohol abuse are often excluded.
• Non-disclosure: Failing to disclose relevant information when applying can lead to exclusions or denial of claims.

The approval process for income protection can vary, but typically takes:

• Initial application: Completing the application can take a few hours to a few days, depending on the complexity.
• Underwriting process: The insurer reviews your medical history, occupation, and lifestyle, which can take several weeks.
• Medical exams: If required, scheduling and completing medical exams can add a few weeks.
• Approval: Overall, the process usually takes 4-6 weeks, but it can be quicker or slower depending on individual circumstances.

Yes, you can still get income protection if you have a pre-existing condition, but:

• Disclosure: It’s crucial to disclose all pre-existing conditions accurately when applying.
• Exclusions: The insurer may exclude the pre-existing condition from coverage or charge higher premiums.
• Specialist policies: Some insurers specialise in covering individuals with pre-existing conditions and may offer more favourable terms.
• Medical underwriting: The insurer will assess the severity and stability of your condition before making a decision.