How long your deferred period should be will depend on your personal circumstances.
Your available budget and what options are offered by your chosen provider can also influence your decision.
Do you receive sick pay?
Receiving sick pay from an employer allows you to benefit from financial aid for a specified period when you’re unable to work.
However, not everyone receives the same benefits package as some employers will offer a more comprehensive sick pay scheme, while others will simply offer statutory sick pay (which is currently £109.40 per week for up to 28 weeks[1]).
It’s likely you’ll want your deferred period to line up with when your sick pay comes to an end to ensure you’re protected in case of long term illness or injury.
The more generous your sick pay, the longer you could afford your deferred period to be.
It’s essential to understand what you’re entitled to in order to allow your policy to compliment your sick pay schedule, so you may wish to consult your employer or employment contract before securing a policy.
Do you have savings?
If you don’t receive sick pay, you’ll likely want to consider any other forms of income or savings you have and how long this would last you.
Are you part of the 13% of the UK population that currently have no savings[2] or, perhaps you have savings, but they’re intended for something else (such as a new car or house deposit)?
In these situations, opting for a shorter deferred period could reduce the amount of time you may need to rely on your own finances.
What budget do you have?
While considering the above is important, it’s also key to factor in your available budget for financial protection.
As a general rule, the longer your deferred period the cheaper your policy is.
If you’re on a tight budget you could save some money by opting for a longer deferred period. However, if doing this, it’s also important to ensure that you won’t be left struggling financially.
For example, if your sick pay lasts for 3 months and you have no personal savings, it’s not realistic to opt for a 12 month deferred period as you’d need to find the funds to get by for 9 months before you’d receive any payments.
By using the help of a broker, you can compare quotes to find the right policy to meet your needs. Simply contact Reassured today.