If you would like the luxury of having a replacement income if you should lose yours then you should consider protecting your income up to a certain amount each month with income protection insurance. This policy can be taken out in case you should fall sick and find yourself unable to work. It would also give you the safety of an income if you should have an accident that meant you had would not be able to earn your own income. A policy would also payout if you should become unemployed through reasons not of your own.



You would have to stand to so many days after becoming unemployed or incapacitated. The majority of standalone providers will make this somewhere between 30 and 90 days. Cover pays out for a certain length of time once it has begun, with some providers offering 12 months of payments and others offer 24 months. You have to check the small print to be sure of the terms of the cover you are considering and also to find out if the provider would backdate to the first day of you becoming incapacitated or of unemployment. The exclusions can also be found in the small print and should be compared against your circumstances.

Of course you must be living in the United Kingdom, the Isle of Man or the Channel Islands to be eligible to take out the protection and also be in full time employment. Other exclusions are added in by the provider and these are dependent on the provider with some adding in more than others.

Income protection insurance would allow you to be able to continue financing your mortgage repayments. It is essential to keep up with your mortgage repayments as if you cannot maintain them you would be looking at having your home repossessed. Another essential repayment is any loan or credit cards you may have.

If you do not maintain your loans then your lender could take you to court to reclaim what you owe through your possessions. At the very least, your credit rating would be affected and this could make borrowing in the future very hard. Naturally you also have many other outgoings to keep up with each month and your protection policy would allow you to maintain them as if you were earning.

The cost of protecting your income differs even with independent providers. With this in mind it is in your best interests to get several quotes before choosing a policy. The premium charged each month will be based on how much of your income you want to protect each month. All lenders will allow you to insure up to a certain amount and this can be found in the terms and conditions of the policy. This information should be made available on the company website so that you can check and compare before buying.

You should not get this type of insurance for your income and a similar product, income protection insurance confused. Income protection insurance would not protect against being made redundant, it would however payout for accident and sickness and for a longer period of time which can be anything up to the age of redundancy.