The Truth About Sick Pay and Income Protection
With so many insurance products on the market meant to protect you, from health insurance to critical illness cover, it’s hard to know where there’s a crossover or which ones are better than others.
However, there is one thing that’s really easy to understand – statutory sick pay doesn’t really do much to help any family whose main breadwinner has become sick and without a salary, paying the bills can be really tough.
Is it worth getting income protection insurance?
Income protection insurance in the UK (or IP for those who prefer acronyms to words!) is a form of insurance that is designed to cover your salary during periods when you are unable to work to pay your way.
This could be because:
- You are sick with a long-term illness
- You have suffered an injury
While there is a type of income protection which is a loss of earnings insurance for people who have become unemployed (typically due to redundancy, rather than through their own fault), most income protection cover is focused around replacing a salary for people who are ill or injured.
Is salary protection like this worthwhile? That depends if you have other cover in place.
Do you have a superior work sick pay scheme? Company sick pay or an alternative work insurance might be part of your employment package. If it isn’t, then you’re reduced to SSP (statutory sick pay) of under £100 a week – ask yourself if that’s enough to cover the mortgage or rent and all your bills.
Do you have enough savings to cover you if you are off work for six months? What about a year? What about two? Can you rely on your partner’s salary to carry you both?
Do you already have critical illness cover that could provide a lump sum in many cases? Have you taken out MPPI (mortgage payment protection insurance) to protect your home? While neither of these is as comprehensive a level of cover as a full income protection policy, they will help.
Or, can you simply ignore the problem?
The core truth about income insurance in the UK
In Britain we have an excellent welfare system and the best public health system in the world, but for all that if you lose a substantial income, we don’t really have any government-led help that’s going to protect you.
SSP is not sufficient for most people earning more than £20,000 a year (and using it!) so if you’re without a dedicated commitment from your employer, you are out on your own.
Income protection plugs the gap and, depending on how well you were doing before you became ill, that gap could be massive.
Call today or fill in our contact form for a member of our dedicated team to get back to you!