If I lose my job what type of work insurance can I have to cover my payments?

Purpose: Income protection insurance pays you a regular income if you're unable to work due to illness or injury. It's designed to help you maintain your lifestyle and cover bills if you can't work for an extended period.

Coverage: It typically covers up to 75% of your income before tax, minus any state illness benefits you're entitled to

• Eligibility: To qualify, you generally need to be:
• Employed for over 16 hours a week or self-employed
• Between 18 and 59 years old at the start of the policy

Deferred Period: There's a waiting time (deferred period) between when you stop working and when the policy starts paying out. This can range from 4 to 52 weeks, with longer periods resulting in lower premiums1

Duration: The policy can pay out until you return to work, the policy term ends, or you reach retirement age (typically 65)

Tax Benefits: Premiums may be eligible for tax relief at your marginal rate of tax, potentially reducing the cost by up to 40%2

Additional Benefits: Some policies offer extras like:

• Hospital stay benefits
• Coverage during unemployment or career breaks
• Confirmed income option (pays based on original income even if your income drops)

Cost Factors: Premiums depend on factors like your job (riskier jobs cost more), age, health, family medical history, and lifestyle choices

Limitations: Income protection doesn't cover job loss due to redundancy or unemployment. It's specifically for inability to work due to illness or injury

When considering income protection insurance, it's important to check your employer's sick pay policy, any state benefits you might be entitled to, and to compare different policies to find the best coverage for your needs and budget.