Income protection, what is it?

In times of increasing costs, we are having plenty of in-depth discussions with clients about income protection.

This includes reviewing the insurance policies that they have in place, to ensure that they remain relevant, fit for purposes, and at the best possible price each month.

When we review our clients’ finances, one of the key conversations we have is about how things could change, if they were to be away from work through illness. This involves conversations around critical illness coverage and income protection policies.

Critical illness cover is an insurance policy that supports you financially if you are diagnosed with one of the critical conditions the policy covers. The conditions and illnesses covered can vary significantly between different insurers. The most comprehensive policies cover 50 different conditions or more, but others are much more limited – this is where a trusted, experienced adviser can really add value.

However, not all conditions are covered by the policy. Common exclusions include non-invasive cancers hypertension, abnormally high blood pressure, and injuries such as broken bones.  Most policies will also state how serious the condition must be to qualify for a payout.

The policy would pay out a tax-free, one-off payment that can be used as the client sees fit. This could be treatment, mortgage costs, rent, or changes to your home, such as wheelchair access, should you need it.

Considering this, it’s becoming more and more important that clients understand their ‘employee benefits’ such as sick pay. An income protection policy can sit alongside a client’s employee benefits and provide additional income to ensure that important financial obligations can be met each month.

Remember, state benefits might not be enough! If you qualify, Employment and Support Allowance ranges from £84.80 a week to a maximum of £129.50 a week (2023 Gov figures). So, with the varying policies available, which can be tailored to suit your requirements and monthly budget, critical illness coverage, and income protection is being made affordable for all.

Taking all of this into consideration, Andrew at Hallcroft Finance would be delighted to offer a no-obligation, no-cost review of your existing policies or discuss what policies may be best suited to your requirements.