Everything You Should Know About Income Protection Insurance

Everything You Should Know About Income Protection Insurance

When an accident or sickness prevents you from going to work, or when you’re laid off, compare income protection insurance can help you financially. Depending on your requirements, you may choose between short-term and long-term insurance packages.

Do you Need this Insurance?

You may be able to rely on savings, a generous redundancy payout from your employer, or corporate sick pay in certain cases. But if you can’t depend on these benefits, unemployment insurance will help you maintain your life and pay your expenditures in the short or long term. However, keep in mind that it will only cover a portion of your income, up to 70% of your pay, when you sign out the policy.

Short-term or long-term

In most cases, long-term unemployment benefits will compensate you if you get sick or injured while working. When you’re able to work again, or until you retire, die, or the insurance expires, it will continue to pay out. Involuntary layoffs may be covered by short-term income protection, although benefits are limited to a certain time period, such as 12 months.

What are the Types of income protection insurance?

When it comes to picking and Compare income protection insurance, you have a lot of alternatives. Consider what you need from yours and make an informed decision.

Accident and sickness

If sickness or accident stops you from going to work, this policy will pay for you. If you’re laid off, you won’t be protected.

Unemployment only

Only if you’re laid off unwillingly will you be covered. There’s no protection here if you’re fired or quit your work of your own, or if you become sick or get hurt on the job.

Accident, sickness

In the case of a layoff, sickness, or injury that prevents you from working, this is the most complete kind of unemployment insurance.

Guaranteed policies

Unless you expand insurance coverage, a guaranteed policy will keep your rates the same no matter what.

Reviewable policies

If you have coverage that is subject to periodic review by your insurer, rates may rise over time, even if they start out lower.

Age-related policies

If you have an age-related policy, your premiums will rise as you become older, regardless of your lifestyle or job.

How You can have more than one income protection policy?

You may require PPI (payment protection insurance) and mortgage protection insurance (MPI). Keep in mind that the amount of income protection benefits you get may be decreased if you obtain compensation from other plans.

Alternatives to Income Protection Insurance


As a sort of income protection, payment protection insurance (PPI) helps you meet your monthly debt obligations if you become unable to work. Sickness, a tragedy, or involuntary unemployment are all possible causes. In most cases, you may safeguard up to 70% of your yearly income with PPI, and if your claim is successful, the insurance will pay out for up to 12 months. However, the terms and conditions of each policy will be different.


A sort of income protection, mortgage payment protection insurance protects your mortgage payments in the event that you lose your job or become unable to work due to a sickness or accident. MPPI is available for both repayments (capital and interest) and interest-only mortgages and may cover your repayment period in full if they don’t exceed 65 percent of your total yearly wage.

Loan Protection Insurance

If you’re unable to work, the payments on your loan will be covered by this sort of income insurance. Known as loan payment protection insurance, it may provide coverage in the event of death, disability, or loss of work income. All of these scenarios are also covered by various insurance plans.


When you’re unable to work due to illness or injury, or if you’ve been laid off, you may rely on an insurance policy called accident, sickness, and unemployment insurance (ASU). In the event that you are unable to continue working due to one of these circumstances, you will receive a monthly payment equal to up to half of your regular wage.

A claim will generally only cover you for 12-24 months, which should give you time to locate another employment or make long-term preparations if you become unable to work any longer.