UK Income Protection Policy
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The Income protection policy was created to protect people who have to protect people! By people it could mean their families or even themselves. The idea is that if you are sick or you have an accident that causes an injury that means that you can't do your normal occupation, you income is replaced. This could be because you have no income at all, but also could be because your sickness or injury means that you can't earn as much as you used to, and that income can be replaced, up to about 75% of your former income.
But people in the UK haven't seemed to have picked up on the importance of protecting their income. Those who are the breadwinners seem to have underestimated the chances of picking up an illness or having an accident that could cause their income to be lessened or even lost. Insurers who set up business models around selling these income protection policies are now approaching the non-earners of the family.
Research has found that if one was to put a value on the household chores carried out by women it would be about £400 a week. Nannies cost £250 a week and child minding can cost well into three figures per week. On top of this, those that aren't working are unlikely to have paid their National Income Contributions (NICs), thus would not actually be entitled to the state incapacity benefit.
Some people think that the best way of covering your partner's contribution is through life insurance. But there is a far greater chance of a non-earning partner suffering from a long-term illness or suffering an injury before they reach the age of retirement than they have of dying.
Yet this group haven't had income protection insurance available to them, as the idea of it is to replace earned income only. But with times changing, most of the major income protection insurers have begun to offer an alternative income protection policy called homecare protection.
Homecare protection pays out a regular and tax-free income during a period of long-term disability or illness. It is normally slightly cheaper than normal income protection policies on average and is offered as a separate policy by some insurers, but as a further option on some standard income protection insurance policies created by other insurers.
What's more, with those insurers who add homecare protection as an option to income protection polices - you can sometimes have a choice when you take a career break to switch on a temporary basis between both types of cover, without needing to provide further medical evidence about your condition.
You can claim on homecare policies should you be proved not to be able to perform three or so important actions from your normal job.
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