Can you secure income protection with a pre-existing…
Loss of earnings insurance is designed to help replace a percentage of your income while you’re unable to work due to illness or injury.
The monthly, tax-free, payments you receive could help you to keep up to date with your financial commitments and other key costs.
The amount paid out to you will vary between insurers, but most will offer to pay out between 50% - 70% of your usual earnings.
This type of policy is also known as income protection or income protection insurance.
Why not compare income protection through Reassured Advice? A friendly member of the team can provide you with the most suitable quotes and offer recommendations on what’s best for you.
Quotes are fee-free and start from just 20p-a-day ‡ .
Keep reading this in-depth guide to find out everything you need to know about loss of earnings insurance, including:
Yes, it’s possible to get insurance for loss of income. This is a policy which will protect your earnings in the event of illness and injury.
Should you fall ill or sustain an injury that prevents you from working, loss of earnings insurance (or income protection) can allow you to make a claim and receive monthly, tax-free payments.
Speaking to an expert can help you establish the best way to protect your earnings.
Why not contact Reassured Advice for your personalised, fee-free and no-obligation quotes?
Anyone with an income could benefit from having loss of earnings insurance in place.
It could be particularly beneficial if you have a family and/or financial commitments to take care of.
If you’re in employment, would statutory sick pay (SSP) be enough to cover your financial commitments? This is currently £109.40 per week up to 28 weeks.
There are also many UK workers who aren’t entitled to sick pay, such as the self-employed.
Loss of earnings insurance could be vital to allow you to carry on with your current standard of living.
Assessing your personal circumstances could help you to establish whether loss of earnings insurance is right for you.
Loss of earnings insurance covers your income in the event you become too ill or injured to work.
There’s no specified list of conditions, meaning you could be covered for a range of illnesses and injuries.
However, your policy will come with a ‘definition of incapacity’ and this will outline what you can claim for.
Definitions of incapacity include:
Why not read this complete what does income protection cover guide for more information »
Loss of earnings insurance policies have terms and conditions which can be tailored to best meet your needs.
Below are some important terms you should be aware of:
|Terms and conditions||Definition|
|Benefit amount||Also referred to as a cover amount. This refers to how much will be paid out to you. Often a percentage of your usual annual income, paid out in monthly (tax-free) payments.|
|Policy term||How long your cover will last. You can choose a policy term to meet your needs (often from 5 - 52 years with cover needing to cease by the age of 70).|
|Deferred period||A specified period that must pass before your payments commence. If you’re still unable to work at the end of your deferred period, you’ll start to receive payments. Common deferred periods include 4, 8, 13, 26 and 52 weeks.|
|Payment period||How long you’ll receive payments for. This could be on a short-term basis of either 1, 2 or 5 years or a long (full) term basis.|
|Definition of incapacity||What makes you eligible to claim on your policy. Options include own occupation, suited occupation and any occupation.|
It’s important to be aware of all terms and conditions before you purchase a policy.
When using a broker, you’ll have an expert on hand to decode any jargon and answer any questions you might have.
A friendly member of the Reassured Advice team is ready and waiting to help.
Most commonly, loss of earnings insurance refers to an income protection policy.
Income protection can be taken out on a long-term or short-term basis:
Loss of earnings insurance could also refer to accident, sickness and unemployment insurance (ASU).
This is a budget form of income protection which will pay out on a short-term basis and often doesn’t require full medical underwriting. For this reason, it’s less certain that a policy will pay out. ASU isn’t available through Reassured Advice.
To compare long-term and short-term income protection, contact a friendly expert at Reassured Advice.
Yes, you can secure loss of earnings insurance for self-employed workers.
This will be a standard policy but with the policy terms and conditions chosen to best suit the needs of those who are self-employed.
For example, you may wish to opt for a shorter deferred period to receive payments as soon as possible and a long-term payment period to receive payments for as long as possible.
If you own a limited company, you also have the option of executive income protection.
This could allow you to cover the income of an employee (including your own). As the premiums are paid for by the business, they could be classed as a business expense (making them tax deductible).
Read our informative income protection for self-employed workers guide for more information on what options are available »
The price you pay for loss of earnings insurance will vary depending on your personal circumstances.
During the application process you’ll be required to provide key information in order for insurers to calculate the price that you pay.
The information required includes:
Below are example quotes for loss of earnings insurance (income protection). Quotes are based on a non-smoker, in good health, with an annual income of £30,000.
The policy term is until age 65, with a 3 month (13 week) deferred period and a 1 year payment period:
|Age||Price per month|
Comparing quotes can help you find the best price on a policy that meets all your needs.
When comparing quotes through Reassured Advice, prices start from just 20p-a-day. Simply get in touch today for your free quotes.
Loss of earnings insurance could pay out up to 70% of your usual earnings (depending on the insurer).
The exact amount that will be paid out to you will depend on your income.
Insurers also often have a maximum benefit amount, meaning no more than the specified amount can be paid out.
To find the best income protection for your needs it’s essential to compare quotes.
Conduct a whole of market income protection comparison and receive fee free quotes using the services of Reassured Advice.
To claim loss of earnings insurance you’ll need to be too ill or injured to work and your incapacity must meet the definition of incapacity listed within your policy.
Typically, this will be an own occupation definition, which means you must be unable to do your own job.
To make a claim, you’ll need to contact your insurer. It’s likely you’ll be sent a claims form to complete and send back.
You may also be asked to provide proof of your earnings and medical evidence of your illness/injury.
Once your claim as been deemed successful, you’ll need to wait for your deferred period to pass.
If you’re still unable to work once your deferred period has ended, you’ll start to receive your monthly payments.
Hopefully the information outlined in this guide has helped to inform you on what loss of earnings insurance is and what it can be used for.
Whether loss of earnings insurance is worth it for you will depend on your needs.
If you have financial commitments such as rent, a mortgage, other loans or you have a family to provide for, then loss of earnings insurance could help you to keep up with essential costs while you’re unable to work.
If you’re self-employed or don’t receive full sick pay from your employer then loss of earnings insurance could help to provide vital funds.
Compare loss of earnings insurance (income protection) through Reassured Advice.
Their whole of market quote comparison service allows you to find the right policy to meet your needs at the best available price.
Not only that but you’ll have an expert on hand to answer your questions and provide advice along the way.
Quotes are personalised, no obligation and fee-free, so why not get in touch?
Protect your earnings from just 20p-a-day.
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