Out of work due to an illness or injury - It will never happen to me!
Let’s hope not. If you are sure you can go through your working life without ever having an accident or suffering a sickness that would impact your ability to pay the bills then you don’t need to protect your income with accident and sickness protection.
However, for millions of households, this has not been the case and the consequences can be disastrous and take years to recover from.
Whilst it won’t pay an income if you’re made redundant or find yourself unemployed for any reason other than ill health it does pay if you are unable to work due to an injury or illness.
Accident and Sickness Protection may be the most important income protection you can have.
There are many options which means it can be tailored to meet either/or both your budget or particular needs. For example, the cost will differ on whether for example, you receive the money immediately or when you have exhausted your savings, or company sick pay period.
As an example, if you are 30, a non-smoker and in good health, then a premium of around £15 per month would provide you with a monthly income of £1,000 for up to 2 years. For a monthly premium of around £30 you could extend the period it pays out from 2 years to 38 years (the number of years to state retirement for a 30-year-old) should you be unable to work due to an accident or sickness.
Knowing you’ve chosen the right protection solution is only achieved if you have received professional advice. There are many Protection providers and each has their own specialisations and exclusions which means policies taken out online or without independent advice are often not paid out.
Lightblue Online was set up to provide specialist help to people unsure how to go about choosing from the many Protection products available. For example, some policies will require a medical whilst others may not and Income Protection underwriters do not use a set list of conditions with many insurers operating without standard exclusions. So it’s important to make sure that if you’re buying a policy it’s the right one for you.
Our specialists will help you to navigate all the options to find the cover that is right for you and your family at an affordable rate.
Accident and Sickness Options
As with all things the more options you choose the higher the price. Income is no different and different insurers load the options differently. It is therefore important to determine what you need and what you would like so we can find the best Accident and Sickness policy available to you in the market place. Below are some of those options.
The number of weeks or months you can survive on, for example, your savings or company sick pay before you need to receive the income from the insurer. The longer the period the cheaper the cost.
Typically 12 or 24 months or for longer-term policies, if you are unable to return to work, up to your selected retirement age. The shorter the period the cheaper the cost.
Level or Indexed
‘Level’ means that the amount you receive will remain the same throughout the time you have the insurance regardless of whether your income or expenditure increases. Alternatively, the amount you receive can increase each year in line with inflation using either the retail price index or the consumer price index. With some insurers, this can be declined on an annual basis.
Guaranteed premiums would suggest that what you pay stays the same throughout the policy term unless you increase the required income amount. For some policies this is true, you pay the same amount month after month until the policy ends. For others its guaranteed to increase based on a rate table which means the price you pay in the future for each £1 is guaranteed to go up each year at the rate set out in the guaranteed rate table sent with your policy. You can, therefore, calculate what your premiums will be in the future..
If your premium is not guaranteed then the premiums can change each year due to age or changes to your health. Reviewable policies usually start cheaper than guaranteed policies, but they may end up being more expensive.
Waiver of Premium
If Waiver of Premium is selected then when you begin receiving an income from the insurance policy the premiums no longer need to be paid until you return to work or your selected pay-out period is reached.
Back to Work Benefit
Receive a percentage of your income if, on returning to work, the illness or injury you claimed for restricts your duties and you earn less. Some insurers will also pay a top-up should you start a different occupation that pays less.