Insurers pay out a whopping £13.9 million per day in income protection, critical illness cover and life assurance according to figures released by the Association of British Insurers and Group Risk Development.
But are you getting the income protection cover that’s most suited to your needs? You’re income changes throughout your life and your source of income changes too – whether that’s through bonuses, commission, overtime or any other form of income.
The maximum benefit payable to you will depend primarily on your income, but not all types of income will be used by providers in their calculations. Understanding the maximum benefit providers will pay is important and that is not as straightforward as you might assume.
Some providers don’t base their maximum benefit on a fixed percentage of earnings. Instead they have a stepped system. For example, some lenders may cover up to 60% of the first £20,000 of earnings, 50% of the next £20,000 and 40% of the rest. This means that different providers will offer better levels of cover depending on the client’s amount of earnings.
With different providers taking into account different forms of income as well as the tiered system that some of them use it is important to find the best income protection for your needs. But as well as this certain providers offer protection with other elements that can add value to make your cover more important – and this is where an adviser can help.
Payment Protection Insurance is optional. There are other providers of Payment Protection Insurance and other products designed to protect you against loss of income.
If you want to talk to your adviser to discuss your options and find out which provider will be more beneficial for you, please get in touch today!