We’ve spoken in the past about what income protection insurance is and whether or not it is worth it, but how do you go about finding a provider that works for you if you decide it is right for you? In this article, we are going to run through what you should be looking for in an income protection insurance provider, and how to measure the best ones. Let’s get straight into it!
What is income protection insurance?
Income protection insurance is one of the main employee benefit insurances, alongside life insurance, health insurance and pension. It is a plan that ensures you still receive a percentage of your monthly income if you are unable to work due to an illness or injury.
What should you be looking for in an income protection insurance provider?
There are a number of different considerations to take into account when you are researching different income protection providers. For example, you need to consider the type of income protection insurance they offer and whether they align with your requirements. Let’s explore some of the different types of income protection insurance product:
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Short-term income protection: Only covers a predetermined period between one and five years.
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Long-term income protection: Covers the individual until they retire or return to work again.
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Own occupation income protection: This type of income protection insurance covers you if you can’t do your own job.
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Suited occupation income protection: Suited occupation income protection covers you if you can’t work in a job to which you are suited by education, experience or reasonable retraining.
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Age-at-outset premium income protection: Income protection insurance with a fixed premium that doesn’t change, , so you know what you are paying from outset.
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Age-related premium income protection: Income protection insurance insurance with a reviewable premium that will change, based on your increasing age. This is cheaper in the early years, to help you budget, and increases over time hopefully as your income increases too.
When you’re looking for an income protection insurance provider, you need to first understand the differences between these insurance products and decide what type suits your specific needs and preferences. You then need to find providers that offer your required product type.
Something else you need to consider when looking into income protection insurance providers is the length of deferred periods that they offer. An income protection deferred period is the amount of time that has to pass before your monthly benefit payments start to be paid once your claim is admitted. For example, a 1 week deferred period means you need to be ill or injured and off work for 1 week before your claim payment starts. Longer deferred periods often result in cheaper monthly premiums, however it does mean that you need to wait longer before your benefit payments start.
If you would miss your monthly wage immediately after being unable to work, it would be worth considering providers that offer shorter deferred periods, despite the increased monthly premiums. The length of deferred periods can vary from provider to provider, but popular periods are 1, 4, 8, 13 or 26 consecutive weeks. Some providers even offer cover from day 1, though you will need to be off for a minimum of 3 days. Make sure you check how long the deferred period is with your provider and product before purchasing. At Wiltshire Friendly, for example, we are proud to offer a short-term deferred product!
How to measure an income protection insurance provider
The best income protection provider is the one that works for you. What works for you may not work for someone else. But with so many different providers out there, how do you measure them against each other?
The truest test of how good an income protection provider could well be how often they pay out on claims! The successful payout rate across the market does vary. At Wiltshire Friendly, we are extremely proud of our claim pay out rate!
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How to find insurance that works for you
Luckily for you, there are plenty of options when it comes to finding high-quality income protection providers, but it is still important to ensure you are aware of your requirements and consider options that meet these needs.
If you need any support with this, contact a Financial Adviser so they can build you a plan that’s right for you.
How Wiltshire Friendly can help
Wiltshire Friendly specialises in delivering income protection solutions to those facing income loss due to illness or injury that impacts their ability to work. We have almost 140 years of experience in helping individuals, employers, and sports players to find an income protection insurance policy that works for them.
If you find yourself in a situation where you need to make a claim, apply for increased coverage, or discuss your specific requirements, contact us today. We are delighted to be able to say that we are there to support individual and group members when they need us!