Building a Safety Net

Building a Safety Net

According to the CII, the demand for protection insurance saw a huge increase in 2020 due to the global impact of COVID-19.  The consequences of the pandemic saw people unable to work either because they developed symptoms, were forced to self-isolate or their employment was affected by the lockdown imposed by the Government.

Many people felt these changes overnight but found themselves inadequately protected.

The Chartered Insurance Institute (CII) has recently produced a guide about the need for income protection, the products available and how to incorporate rehabilitation.

Lee Howard, Howard Mortgages comments, “With more people seeking to engage actively with protection insurance, it is important that people understand all of their income protection insurance options.”

What is income protection?

Income Protection (IP) insurance protects against a financial loss if a person finds they are unable to work for health or disability reasons. It works by paying a regular income to the insured if their illness, injury or disability prevents them from working, following a ‘deferred period’, and until the end of the benefit term or cease age. The policy benefits will also stop if the policyholder returns to work or dies.

The main benefit of having an income protection policy, or being a member of an employer-provided policy, is that the insured person can continue to pay their bills, rent or mortgage if they are unable to work due to an illness or injury.

There are two main types of income protection:

Individual income protection (IIP): When an individual protects a portion of their earnings independently by purchasing cover through a financial adviser, an insurance broker or directly from an insurance provider.

Group income protection (GIP): Employer-provided income protection insurance that protects their employees’ income. The employer is the policyholder, premiums are submitted to the insurer by the employer and claims are generally paid to the employer to pass on to the employee through the PAYE system as reduced salary.

Read more about income protection here >

What protection is right for me?

With unprecedented changes affecting people, whether self-employed or employed, and the businesses they work for, income protection products need to be fit for purpose and recommended responsibly. Recent factors such as an increase in furloughed workers, a rise in claims due to mental health issues or the inability to work from home mean that people’s circumstances are constantly changing. Those who may not have been feeling financially vulnerable six months ago may find their situation has changed dramatically.  Therefore, if you are reviewing your finances, it is vital to discuss your protection insurance arrangements with an expert adviser.

With offices in Torbay, Teignmouth, Exeter & Bristol, we’ve got the South West region covered and we also serve customers throughout the UK.  Our team of award-winning insurance advisers are on hand to provide you with tailored insurance solutions that fit.  We’re known for our excellent service that guarantees customers a simple and cost-effective process. Service should be seamless so we make sure our customers work with the same expert adviser from start to finish.

We offer an initial appointment at no cost or obligation to explore the options and can be done remotely or in person, contact the team at Howard Mortgages on 01803 554455 or contact us here >

Read more in the CII Guide to Income Protection, Sept 2021 here >