Income protection insurance is designed to replace your monthly income if you’re unable to work due to an illness, injury or disability. Cover can be purchased whether you’re an employee or self-employed.
There are different types of income protection cover. Some are set up to cover just a short period, such as one or two years, while other policies can cover a large portion of your working life, such as over a 25-year term. In some cases, policies can even run beyond your retirement age.
Our insurance policies listed above offer long-term protection, providing cover for 25 years. Regardless of the agreed payout period and how many times you make a claim, the cover remains in place over this term,
Should you need to make a claim, the cover will pay out a portion of your monthly gross income (typically up to a maximum of 60%) tax-free. The money can be used to help cover bills and day-to-day living costs while you’re not earning your usual income.
There are different levels of long-term income protection. The highest level provides cover if you’re unable to do your own job, known as ‘own occupation’ cover. The policies in our list above are all for ‘own occupation’ cover.
But cover is also available (at a lower cost) for ‘suitable occupation’ or ‘any occupation’, which means you could only claim if you couldn’t do other types of work, or any work, for example. There are fewer options for ‘any occupation’ level cover.
Premiums for long-term income protection can be guaranteed, which means they’re fixed for the life of the policy. Or you can opt for reviewable premiums, which may start out lower but will rise over time as you age.
Pro Tip
It is important to note that income protection insurance doesn’t cover job loss or redundancy. For this cover, you would require an accident, sickness and unemployment (ASU) policy
