Protecting Your Ability to Meet Regular Costs
Income Protection Advice for Employed and Self-Employed People
If illness or injury prevented you from working, the effect could continue long after any employer sick pay or short-term savings had been used. Income protection is designed to provide regular payments that replace part of your income after an agreed waiting period, subject to the policy terms.
Anderson Mortgages can help you assess the need and compare suitable short-term or long-term arrangements.
Start with the Income Gap
How Long Could You Manage without Your Usual Earnings?
The answer depends on your employer benefits, savings, household income, regular commitments and any other support available. An employed person may receive full pay for a period before moving to reduced pay or statutory support. A self-employed person may have no employer sick pay at all.
Your adviser will review what would continue to come in, what still needs to be paid and when a shortfall could appear. That helps define the purpose of the cover rather than choosing an arbitrary benefit or waiting period.
Income protection does not normally replace all earnings. The amount available is linked to a proportion of eligible income and the insurer's rules. The recommendation must also remain affordable alongside your other household priorities.
The Main Policy Decisions
What Shapes an Income Protection Recommendation?
Employment and Income
The way income is earned and evidenced can affect the benefit available, particularly for self-employed applicants or people with variable earnings.
Employer Sick Pay
Existing sick-pay arrangements help determine when policy payments may need to begin and whether there is a genuine gap.
The Deferred Period
This is the agreed waiting period between becoming unable to work and eligible payments starting. A longer wait can reduce the premium.
The Benefit Period
Some policies pay for a limited period per claim, while long-term cover may continue until recovery, the policy end date or another stated limit.
Definition of Incapacity
The policy explains how inability to work is assessed. Definitions can refer to your own occupation, a suited occupation or another basis.
Health, Work and Lifestyle
Age, health, smoking, occupation and the chosen policy features can affect the terms, exclusions and premium offered.
Short-Term and Long-Term Cover
Matching the Benefit Period to the Risk
Short-term income protection is designed to pay an eligible claim for a limited period, such as one or two years. It may address the most immediate income gap at a lower monthly cost than longer-term cover.
Long-term income protection can provide payments for a much longer period, subject to the policy terms, while the insured person remains unable to work. This can offer broader support but may carry a higher premium.
The most suitable balance depends on how long other resources may last, the effect of a prolonged absence and what monthly cost is sustainable. Your adviser will explain the differences rather than assuming that the longest or shortest benefit period is automatically right.
Important to Understand
Policy Definitions Affect When a Claim Can Be Paid
Income protection is not simply a policy that pays whenever you are off work. A claim is assessed against the insurer's definition of incapacity, the medical evidence and the other terms of the policy.
An own-occupation definition generally considers whether you can perform your particular occupation. Other definitions may consider work suited to your experience or a wider ability to work. Definitions and eligibility vary, and an insurer may apply exclusions or different terms based on health, occupation or other information supplied during the application.
Accurate answers are essential. Your adviser will explain the application questions and the significant policy conditions, but the insurer makes the underwriting and claim decisions.
Part of a Wider Protection Plan
Income Protection and Other Cover Do Different Jobs
Critical illness cover generally pays a lump sum only after a diagnosis that meets a listed definition. Income protection can cover a wider range of illnesses and injuries that prevent work, but it pays regular benefits and uses an incapacity definition.
Life cover addresses death rather than a period away from work. Reviewing all existing personal policies and workplace benefits helps avoid gaps or unnecessary overlap.
Income Protection Questions
Frequently Asked Questions
Customer Reviews
What Our Customers Say
Review the Income Gap
Ask Us About Income Protection
Tell us whether you are employed or self-employed and what you would like to understand. Please do not include medical information, income figures or other sensitive details in the public form.
As with all insurance policies, conditions and exclusions will apply.