LONG TERM
INCOME PROTECTION
You cannot be a superdad without insurance.
What is Long-Term Income Protection Insurance
Long-term income protection insurance is a type of insurance that can help you make up for lost wages in the event that an injury or illness prevents you from working.
Unlike short-term income protection insurance, long-term income protection insurance may offer you a longer payment period (how long you receive payments for).
Up to 70% of your typical yearly income may be paid to you, and you will receive it in monthly (tax-free) instalments.
You could choose a payment period that lasts till retirement, depending on your needs. As opposed to a short-term income protection insurance policy, which pays benefits for a year or two.
While you’re unable to work because of an accident or illness, this can help you meet important financial obligations.
You may choose the most cost-effective coverage by comparing long-term income protection insurance quotes with Daddy Insurance.
Long-Term Income Protection Insurance – Key Points
Long-term income protection insurance:
- Can help to replace a percentage of your usual income if you’re unable to work due to sickness or accident.
- Doesn’t cover unemployment.
- Policies can pay out between 50% and 70% of your usual income (maximum percentage offered will vary between providers).
- Payments will be made in monthly (tax-free) instalments.
- Offers longer term cover than short term income protection.
- Can be secured through Daddy Insurance easily & stress-free.
What Does Long-Term Income Protection Insurance Cover
Long-term income protection insurance will cover you for accident and sickness. This means you can claim for:
- Long-term illness that leaves you unable to work
- Serious injury that prevents you from working
There’s no specific list of illnesses or injuries included with an income protection insurance policy.
The monthly payments you’ll receive also won’t be tied to any specific financial commitment, meaning you can use them however you see fit.
This could be to cover:
- Mortgage payments
- Rental payments
- Household bills
- Daily living costs
- Childcare costs
- Transportation costs
- Monthly debt payments (such as credit cards or loans)
- Leisure costs
You can use your income protection payments to cover whatever your usual monthly income would be used for – allowing you to continue your current lifestyle with minimal financial disruption.
Find the best long-term income protection insurance policy to meet your needs using the services of Daddy Insurance.
What Doesn’t Long-Term Income Protection Insurance Cover
There are a few things that won’t be covered within a long term income protection policy. These include:
- Unemployment (both involuntary and voluntary)
- Pre-existing medical conditions
- Self-inflicted injuries or illnesses
- Illness/injury as a result of drug or alcohol misuse
- Death (although some providers may pay out a small sum of money to loved ones if you pass away while your policy is active)
Talking to an expert, such as Daddy Insurance, can help you to understand the full terms and conditions of your policy so you know the cover you’re taking out is right for you. Get your free income protection insurance quote today!
Do I Need Long-Term Income Protection Insurance
Your specific situation will likely determine if you require long-term income protection insurance.
Long-term income protection insurance will be most helpful to those who would find it difficult to meet their daily expenses and financial obligations if they were out of work for an extended length of time.
You might require long-term income protection insurance if you:
- Are self-employed.
- Are an independent contractor.
- Receive partial sick pay.
- Lack of personal savings.
When you most need financial support, having long-term income protection insurance in place might be helpful (especially if you don’t receive any other financial aid, like sick pay).
You can choose to be insured for the remainder of your working life by setting your payment period to last until retirement age.
A short-term income protection insurance policy can be sufficient for folks who are on a strict spending plan or have other sources of money at their disposal.
The best approach to get all the information you require is to discuss your needs with an expert. You can compare prices and receive the essential information from Daddy Insurance.
Let Daddy Insurance assist you in selecting the ideal income protection insurance plan.
How Does Long-Term Income Protection Insurance Work
When a major illness or injury renders you unable to work, long-term income insurance pays out a portion of your salary (usually up to 70%).
Until you can work again, until your policy expires, until the end of your payment period, or until you retire, you’ll receive these payments (whichever happens first).
Long-term insurance typically provides protection for a minimum of five years, up to retirement.
You won’t get payouts right away, unlike other types of protection. You’ll have to hold off until your postponed (or waiting) time is through.
The deferred period is the length of time you must be out of work before receiving compensation. Once your deferred period has expired, your benefits will only start if you are still unable to work.
For instance, if you choose an 8-week deferral period and are still unable to work after that time, your payments will start.
Throughout the duration of your long-term income protection insurance, it is also possible to submit more than one claim.
What is the Best Long-Term Income Protection Insurance Policy
The best long-term income protection for you will be the policy that meets your needs and is at a price that’s within your budget.
When taking out income protection, there are a range of policy details you can select to ensure your policy best meet your needs.
These include:
Deferred Period
The deferred period is the length of time you must be out of work before receiving compensation.
After your deferred period expires, payments will only start if you’re still unable to work.
Deferred periods typically range from 4 to 52 weeks (but this can vary between providers).
Your unique situation will determine how long your deferred should be.
If you get sick pay, for instance, you may decide on a deferred period that would finish when you ceased getting sick pay.
Definition of Incapacity
This will define the circumstances in which you can make a claim on your policy. Typically, there are three definitions:
Own occupation – Will allow you to claim if you’re unable to do your specific job role. This is the most comprehensive definition.
Suited tasks – If you’re unable to do your own job you may be asked to do another job that’s suited to your skills and experience instead. if you can’t do either, you’ll be able to claim.
Any occupation – You’ll only be able to claim if you’re unable to work at any job.
Payment Period
The time frame during which you will receive your income protection benefits is known as the payment period.
This could last for as little as five years or all the way up until you retire (if your conditions leaves you unable to work again).
Again, your individual needs will determine how long you’d like your policy to pay out.
Longer payment terms can be chosen by those who don’t have access to alternative sources of funding in order to avoid having to use their personal savings.
Premium Payment
This will outline how you pay for your policy. Common premium payment types include:
- Guaranteed – These are premiums that remain fixed throughout the lifetime of your policy.
- Reviewable – These are premiums that will change over time (this could be for a variety of factors such as age or risk).
- Age-banded – These are premiums that will increase each year as you age (usually at a guaranteed rate).
A friendly member of the Daddy Insurance team will be happy to talk you through each step of the application process, so you know your policy will have the right terms to meet your needs.
How Much Does Long-Term Income Protection Insurance Cost?
Long-term income protection can be taken out through Daddy Insurance.
The exact price you pay will depend on your personal circumstances and your policy details.
Information taken into consideration when calculating your premium includes:
- Age
- Occupation
- Smoking status
- Medical history
- Policy length
- Length of deferred period
- Length of payment period
- Definition of incapacity
- Premium payment type
How Much Does Long-Term Income Protection Insurance Pay Out?
Between 50% and 70% of your typical annual salary can be paid out as monthly instalments under a long-term income protection insurance.
Your unique situation and the terms and conditions of the insurance you have chosen will determine the precise amount that is paid out to you.
Why not get in touch with Daddy Insurance to compare rates and discover the best coverage for your needs?
How Long Does Long-Term Income Protection Insurance Pay Out For?
If you indicate this duration during the application process and in situations where your condition prevents you from working again, a long-term income protection policy may be able to pay you until you reach retirement age.
Up until the earliest of the following events, an income protection policy will continue to pay you out.
- Your policy expires.
- Your payment period comes to an end.
- You get better & go back to work.
- You reach retirement.
What is the difference between long-term income protection insurance & short-term income protection insurance?
In order to assist you replace lost income when you’re unable to work due to illness or an accident, both long-term and short-term income protection will pay you up to 70% of your typical salary.
There are some distinctions between the two, though.
The payout duration, which is how long the policy can take to pay out to you, and the cost of your insurance are the key variations.
Long-term income protection typically costs more than short-term income protection since it offers coverage over a longer period of time.
Long-Term Income Protection Insurance vs Critical Illness Cover
Critical illness insurance is another option that might assist in making up for missed wages during a period of illness.
For an additional fee, critical illness coverage can be added to a life insurance policy or purchased separately.
If you are diagnosed with a serious disease and unable to work, a critical sickness insurance policy will pay out one lump sum payment rather than monthly instalments like an income protection policy.
Additionally, you will have the option of selecting a cover amount rather than having it calculated as a percentage of your income.
Your unique situation will determine which choice is best for you. Despite their similarities, there are a few significant differences:
Income Protection
- Can help you to replace lost income.
- Covers you for sickness and accident.
- Will pay out to you in monthly payments.
- Can easily be budgeted to meet monthly financial obligations.
- Cover amount not guaranteed to meet all financial commitments.
- Can’t be added to a life insurance policy but both policies can be taken out simultaneously.
- No specific set of illnesses/injuries listed within the policy.
Critical Illness Cover
- Can help to replace lost income.
- Covers you for serious illness.
- Will pay out to you in one lump sum payment.
- Could potentially be stressful to budget a large sum of money over a long period of time.
- Lump sum could help to cover more expensive financial commitments.
- Can be added to a life insurance policy for an additional cost.
- Specific set of illnesses will be listed within the policy.
Compare Long-Term Income Protection Insurance Quotes
Comparing quotes will allow you to secure the best long-term income protection insurance policy to meet your needs.
Daddy Insurance help you to do this by providing you with free, personalised and no-obligation quotes.
A friendly member of the team can help you to compare quotes from our panel of insurance providers, ensuring you find the right policy at the best available price.
