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Do you need income protection insurance?

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Income protection insurance would be vital to you if:

  • You are self-employed, a contractor or company director and would not be able to pay the bills if you were unable to work. In this scenario, an income protection policy would ensure that you would be able to pay your bills if you were ill or injured.
  • You are employed and the sole income provider and would not be able to pay the bills if you were unable to work. As the sole source of income, income protection insurance helps to protect yourself and your family financially. Find the right policy for you, to ensure you can pay the bills and monthly outgoings if you suffered an accident or sickness that meant you could not work.
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Income protection insurance is important to you if:

  • You are self-employed, and you don’t have a large amount of savings that you are happy to dip into. Consider taking out an accident and illness policy for maximum protection.
  • You are the sole income provider and your employer offers sick pay. Check what level of sick pay you would get from your employer before making a final decision about income protection insurance. Few companies offer long term sick pay beyond the Statutory Sick Pay, so it is important to have all the information in advance.
  • You live in a joint income household but are unsure if your partner would be able to cover the financial responsibilities. If your partner’s salary couldn’t cover the bills, then it would be worthwhile considering an income protection insurance policy.

How does an income protection insurance policy help when you need to claim?

You stop working due to an accident or illness, and stop earning an income.

You inform us, and we will guide you through the claims process with the insurer.

You will start to receive your monthly payout.

The monthly payout will continue for as long as your insurance policy covers.

What are your policy options?

Short-Term or Long-Term Protection
There are two types of accident and sickness insurance plans.
Short-term plans usually range from 6 months to 2 years. Long-term plans will pay out until you are well enough to go back to work, whether that’s 1 year or 10 years.
Deferred Period
A deferred period, or excess period, refers to the duration of time between stopping working, and when your insurance policy will start to pay out.
This can range from just a couple of days, up to a whole year. The standard length of time for most long-term insurance policies is 4 weeks.
Indexation
Indexation helps to protect your policy against inflation. Your monthly payments will increase each year, to reflect any increases in costs according to the Retail Prices Index (RPI).
Policy Cease Age
Your insurance policy cease age is how old you will be when the policy will end. This is normally the age you will retire at but could be older.
Maximum Pay-Out Period
This refers to the longest length of time that you can make a continuous claim on your income protection insurance. For short-term policies this could be from anything between 6 months to a couple of years. There are not usually restrictions with a long-term policy. You will receive payments until you are either able to return to work, or you reach your policy cease age.

What affects the costs income protection?

The costs of your income protection will depend on various factors. The more you want to insure for each month, will subsequently increase your premium, as well as the length of the policy and your deferred period.

Your age can also play a role. The older you are, you are seen as more likely to make a claim and so your policy premium will reflect this.
It is important to declare any previous medical conditions or illnesses. Certain disorders may not be covered by your income insurance and others may mean you incur a higher premium.

You will also be asked about your smoking status. Smokers are deemed higher risk resulting in a higher cost for your insurance.

Monthly Payout

The higher your monthly payout amount, the higher your policy premium.

Policy Cease Age

The longer the policy runs, the higher the premium will be.

Deferred Period

The longer the length of time before your policy pays out, the cheaper your premium.

Age

The older you are, the premium is likely to be higher.

Medical History

Previous illnesses or injuries may increase policy premiums or be excluded from your cover.

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About Us

Part of Halo Consulting, Black Lion Insurance are a dedicated team of insurance consultants with years of experience in guiding our clients to a solution that meets their specific needs. We specialise in helping both employed and self employed individuals, as well as business owners on a variety of solutions, which range from life insurance, income protection insurance, keyman insurance and shareholder protection insurance.

The guidance and/or information contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK

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Black Lion is part of Halo Consulting and a trading style of Halo 2018 Ltd which is authorised and regulated by the Financial Conduct Authority (FCA). Financial Services Register Number 811239. “