Income Protection

Income replacement insurance provides an income should you be unable to work due to accident or illness. This policy can only be cancelled by the policyholder, the insurance company can not under any circumstances cancel the contract once accepted and premiums commenced.

Income is paid until the policy terminates, you return to work or your death, which ever happens first. There is a maximum amount of cover you can have which is usually 50-65% or your income. For the self-employed, the benefits are calculated on the taxable income, normally, for the 12 months before you became unable to work.

The income from this policy is usually paid tax free but you do need to be aware that any income you receive will impact on the amount of state incapacity benefit you wish to claim. If the premiums are paid through a business and tax relief granted to the cost then benefits will be paid after income tax.

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