How long would income protection cover me for if I lost my job?
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nickyp456
1 year ago
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Darren Smith
answered 1 year ago
It would vary from 12-24 months but the 24month option is quite rare and will naturally cost more to buy cover for that period. Many providers insist on you having a mortgage and will determine the amount of cover you can have by a % of your mortgage payment or % of your income.
its also worth noting that not all providers will allow you to take cover when not linked to a new mortgage or will make you wait up to 6 months before you can claim (ie 6 months before you are given warning that you might be at risk of loss) whereas when linked to a new mortgage this can be as little as 2 months.
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its also worth noting that not all providers will allow you to take cover when not linked to a new mortgage or will make you wait up to 6 months before you can claim (ie 6 months before you are given warning that you might be at risk of loss) whereas when linked to a new mortgage this can be as little as 2 months.
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Paul Ross DipPFS CII(MP&ER)
answered 1 year ago
Between 12 and 24 months, depending on the provider. Darren's comments are quite valid, and I know of 1 provider who will cover you for unemployment without having a mortgage.
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John Stirling
answered 1 year ago
The answers above cover most points, I'll just add the following caveat of 'if it covers you at all' - income protection can be for health related issues, redundancy, or both. It will only cover you for job loss if you have redundancy cover. It will also only cover for redundancy, not for being sacked.
For the self employed typically you will need to enter into involuntary insolvency for it to pay out, so it is rather less valuable for the self employed.
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For the self employed typically you will need to enter into involuntary insolvency for it to pay out, so it is rather less valuable for the self employed.
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Dr David Carter FPFS
answered 1 year ago
Are you talking about income protection, or accident sickness or unemployment protection (ASU)? Income protection will provide you with partial income replacement for long-term medical problems, if you can't work because of them - payments can go on for many years: until the end of the policy. ASU policies provide the short term cover that John, Paul and Darren have fully discussed.
These policies are not mutually exclusive, and serve different kinds of need.
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These policies are not mutually exclusive, and serve different kinds of need.
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Richard Salter
answered 1 year ago
The above contributors have it exactly right. If you cannot work having been made redudant then cover will be for a maximum of two years. This therefore rules out the self employed. There is also typically a three month period before any claim will be settled - during which time you may well secure another job. In my experience clients pay as much per £100 of cover, if not more, to protect against unemployment risks as against ill-health cover and yet they cannot claim for an initial period, will be debarred if they take out cover in anticipation of being made redundant (naturally enough) and even if a claim is entertained will still see benefits stopped within 24 months.
I much prefer the better value ill-health cover type of policy and to build up an emergency cash reserve to see me through short periods (hopefully) of unemployment. As such i believe most people are better off taking out income protection cover against health related problems, accidents and illnesses rather than unemployment as such policies will continue paying either until you get better and can return to work or reach the plan cessation date, 50, 55 or 60 most commonly.
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I much prefer the better value ill-health cover type of policy and to build up an emergency cash reserve to see me through short periods (hopefully) of unemployment. As such i believe most people are better off taking out income protection cover against health related problems, accidents and illnesses rather than unemployment as such policies will continue paying either until you get better and can return to work or reach the plan cessation date, 50, 55 or 60 most commonly.
Expert Financial Adviser Answer
James White
answered 1 year ago
In addition to the answers provided above (which cover redundancy insurance very well), another option is to consider a long-term income protection plan which includes redundancy protection. This type of plan could cover a proportion of your earnings against the risk of sickness and injury until retirement and provide up to 12 months of redundancy protection. It's another option to consider, too many focus on the redundancy side and overlook the long-term incapacity risk.
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