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Short-term income protection (STIP) can help to replace a percentage of your lost income if you become unable to work due to an accident or sickness.
You’ll receive monthly, tax-free income payments that can help to cover the following financial commitments while you’re off work:
But how does short-term income protection differ from long-term income protection and which is the best option? Keep reading to find out…
Reassured Advice can compare both short-term and long-term income protection quotes on your behalf to help you find the most suitable solution.
Why not get in contact for your free and no-obligation quotes?
|Protects against illness||Pre-existing medical conditions|
|Protects against injury due to accident||Illness or injury because of alcohol or drug abuse|
|Voluntary redundancy/job dismissal|
Short-term income protection will cover you for accidents and sickness.
Unlike other forms of cover, there isn’t a specific set of illnesses listed within your policy, so you’ll be able to make a claim for any illness that prevents you from working for a prolonged period of time.
You’ll also be able to claim for injuries sustained from an accident, regardless of whether the accident happened at work or not.
Are there any exclusions?
There may be some exclusions written into a short-term income protection policy. These can include (but are not limited to):
Short-term income protection will cover a loss of income due to accident and sickness. This means you can make a claim in the event of:
The type of policy you have will be based on the level of incapacity you’d like to be covered for.
You have the option to choose between the following definitions:
Offers the highest level of cover as you’ll be able to make a claim if your illness or injury prevents you from carrying out your specific job. For example, if you’re a delivery driver and break your leg and can’t drive, you’ll be able to make a claim.
You’ll be able to make a claim if you’re unable to complete your specific job or any other job that’s suited to your skills and experience. This means that if there is another role that you can carry out during your period of illness or injury, you won’t be able to make a claim.
Offers the lowest level of cover as you’ll only be able to claim if you can’t complete your specific job or any other job. In most cases, you’ll need to be completely unfit to work. Due to this definition of incapacity, it can be hard for a successful claim to be made.
Reassured Advice can provide full income protection solutions as well as budget-friendly options.
Simply get in touch to compare quotes from the UK’s leading providers, as well as smaller specialist companies.
It’s possible to secure short-term income protection through Reassured Advice from just £5 a month.
The table below shows the monthly sum assured you can secure for a premium of £5 a month. These quotes are based on a policy with cover up to age 65 with a 3-month deferred period.
|Age||Monthly sum assured|
However, the exact cost you’ll pay will be calculated using your personal circumstances.
There are many factors that can influence the price you pay for your premium, such as:
This highlights the need to compare multiple quotes to find the insurer who’ll offer you the most favourable terms.
Reassured Advice can do this on your behalf to save you time and money.
There are a range of premium payment options to choose from, this can also have an influence on how much you pay.
Short-term premium payment options include:
Reassured Advice can provide short-term income protection solutions with reviewable, age banded and guaranteed premiums.
Why not speak to a friendly member of the team to gather all the information you need about these premium types?
Typically, short-term income protection won’t cover you for any type of unemployment.
You’ll only be able to make a claim if you’re too ill or injured to work.
However, there are some short-term protection options that can provide unemployment cover, such as Accident, Sickness and Unemployment (ASU).
This is a budget form of insurance cover that allows you to make a claim if you can’t work due to an accident or sickness or if you lose your job as a result of redundancy.
However, due to the current COVID-19 pandemic, some providers have temporarily ceased providing any unemployment cover to new applicants.
If you’re currently out of work due to unemployment, there are government benefits and schemes you can sign up for.
Yes, you can use short-term income protection payments to protect your mortgage.
Income protection payments aren’t tied to a specific commitment, so it’s possible to use them to help you continue making mortgage payments while you’re unable to work.
However, depending on how much you receive in income protection payments, it might not cover the full cost of your monthly mortgage payment (especially if you have other financial commitments to cover).
Alternatively, you could take out mortgage payment protection insurance (MMPI). This is a form of cover specifically designed to cover mortgage payments. However, this isn’t something we currently offer at Reassured Advice.
Or you could take out a life insurance policy with critical illness cover. In the event you’re diagnosed with a serious illness (listed within the policy) you can make a claim and receive a lump sum pay out.
Depending on your remaining mortgage balance and cover amount, this lump sum could be budgeted monthly or be used to pay off your mortgage in full.
We have written a dedicated mortgage income protection article if you require more information »
Why not get in touch with Reassured Advice to find the best option to protect your mortgage?
Short-term income protection will typically pay out between 50 - 70% of your usual gross annual income.
For example, if your gross salary or net income is £50,000 and you have a policy that pays out at 60% for 12 months, you could receive £2,500 each month (£30,000 over the lifetime of your policy).
However, exactly how much is paid out to you will depend on the provider and the terms and conditions of your policy.
Why not compare short-term income protection from all of the UK’s leading providers to find the best policy at the best price? Simply get in touch with Reassured Advice.
You’ll start to receive your short-term income protection payments once your deferred period has passed.
Your deferred period is the length of time you have to be unable to work before your policy starts to pay out.
You choose how long you wish your preferred period to be at the point of application, although options can vary depending on the provider.
How long you wish your deferred period to be will typically depend on your personal needs.
For example, if you benefit from full sick pay or have personal savings, you may be able to rely on these for some time before you require your payments to commence.
However, if you don’t receive full sick pay or don’t have personal savings, you may require your payments to begin sooner.
Upon the diagnosis of an illness or after an accident has taken place that has left you injured and unable to work, you can make a claim on your policy.
You may be asked to provide medical evidence from your GP or a medical professional to support your claim.
You may also be asked to fill out a claims form to send back to the insurer.
Once your provider has all the correct information your claim will be assessed.
Once your claim has been accepted you’ll need to wait for your deferred period to come to an end before you start to receive your payments.
While both short-term and long-term income protection provide financial support should you become unable to work due to accident or sickness, there are some key differences. Including:
|Short payment period (up to 2 years depending on the provider)||Long payment period (can continue to pay out for the remainder of the policy term, which could be all the way up to retirement)|
|Some policies allow unemployment cover to be added||No option to add unemployment cover|
|Cheaper premiums due to shorter pay out period||Premiums are more expensive due to longer pay out period|
The main difference is how long you’ll receive your payments.
With short-term income protection, it’s possible for your payment period to last for up to 2 years (although this can vary depending on the provider), whereas long-term income protection can offer a much longer payment period - even up until you retire.
As you’ll receive payments for a much longer period of time, long-term income protection comes with a higher monthly premium.
If you’re on a budget, short-term income protection can be beneficial in helping you cover your expenses if you’re temporarily unable to work.
However, the level of cover provided may not be sufficient if you were to fall more seriously ill.
The right policy for you will depend on what you want to cover and what suits your budget.
Why not use the Reassured Advice broker service to compare both short and long-term income protection to find the best solution for you?
Whether you need short-term income protection will largely depend on your own personal circumstances.
Short-term income protection can be beneficial to those:
Those with a family and/or financial commitments, such as a mortgage, may benefit from having short-term income protection in place to help cover your expenses if you were unable to work.
While you won’t receive your full salary, the percentage paid out to you can be extremely useful in helping you maintain your daily living costs and means you may not have to dip into your personal funds.
While short-term income protection can be beneficial to self-employed workers, you may want to protect your finances with a more long-term solution to ensure you’re protected for your whole working life.
Read our comprehensive article on income protection for self-employed workers »
You may not need short-term income protection if:
Comparing your current outgoings and expenses with your available forms of finance may help you to work out what financial protection best suits you.
Alternatively, you could contact a friendly member of the Reassured Advice team who can provide information about all the options that are available.
By comparing quotes you can secure the best deal on a policy that meets all of your needs.
Why not enlist the help of an expert, like Reassured Advice, to do this on your behalf?
Reassured Advice can compare short-term (and long-term) income protection quotes from the whole of the market, helping you to save time and money.
They can also be on hand to answer any questions you might have.
The best part is you can secure short-term income protection from just 20p-a-day.
Simply get in touch for your free, no-obligation quotes.
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