Tanner’s Tips comprises of a father and daughter team, an unstoppable duo fighting apathy in the world of finance.
Let’s discuss Income Protection/Permanent Health Insurance – What is it?
So previously we have discussed the importance of preparing for the unexpected, by means of an Emergency Fund. What if you had a money machine, and that was your source of income, every week/month it dispensed an income, would you insure it to protect your income if it were to cease? If the money machine stopped producing your income, what would you do? How would you pay your mortgage/rent, bills etc.?
Income protection insures your “money machine”, i.e. your capacity to earn, by paying out a regular income should you suffer a loss of earned income by being unable to work due to sickness or disability that lasts longer than a deferred period. One thing that is great about income protection is that it covers mental illness too. This type of policy is not suitable for everyone however, as there must be a loss of earned income. Another benefit of this type of policy is that you can claim tax relief on premiums, up to an annual limit of 10% of your income. There are of course limits and restrictions on the benefit you may receive, the maximum you can claim is 2/3rds of your income, less any State Benefit you may be receiving. Premiums are calculated to reflect the risk of your occupation, e.g. Farmers or builders would find it extremely difficult to obtain this type of cover, while accountants would have no problem and would have a lower premium, depending on their health of course.
We do, of course, offer this service, so if you would like to discuss this further, please get in contact with us.
We would love to get feedback on these posts, and if there is anything in particular you would like to hear about, please let us know.