It’s extremely difficult to plan ahead financially for the unknown, like an unforeseen illness that could pull you out of work for an extended period of time – there are simply too many variables to consider.
But planning ahead for a long spell out of work is extremely important, as your income might be drastically lowered or stopped altogether. How will you make ends meet for you and your family? How will you keep on top of mortgage repayments?
That’s why it’s important to consider illness insurance, if you haven’t done so already, to ensure you and your family are protected if you fall seriously ill.
Illness insurance is an umbrella term covering several specific types of insurance that protect your income if you are unable to work because of an accident, disability or long-term illness.
Some pay out in a single lump sum, while others pay out a regular monthly income. Other types of illness insurance cover payments for specific things, such as mortgage or credit card payments.
Illness insurance schemes include:
- critical illness insurance – lump sum if you are diagnosed with a specific illness
- income protection insurance – pays an income for the rest of your life until you reach retirement or can’t work because of ill health
- payment protection insurance – covers mortgage, credit card or personal loan payments if you can’t work because of ill health.
If you can’t work because of illness, you may be able to get state benefits or sick pay from your employers, but these may not cover all your needs.
In that case, illness insurance can boost your income while you are out of work.
Mortgage payment protection insurance
Mortgage payment protection is a specific type of illness insurance that covers the cost of your mortgage repayments.
We’ll go into detail on this specific policy, because your mortgage is likely to be one of if not the biggest expenditure of your household, and you must keep up with all your repayments at the risk of losing your home.
Also available to those who lose their job through redundancy, or have to stop working due to injury, the policy usually covers you for 12 months or until you can return to work – whichever happens first.
You can choose how much you want your mortgage payment policy to pay out each month, and whether you cover an additional 25% of your mortgage repayments to cover bills and other expenses for a higher cost.
However, providers typically set monthly upper limits of between £1,500 and £2,000.
If your claim is successful, you’ll have to wait between 30 and 180 days, known as the waiting period, before you get your payments.
The longer the waiting period, the cheaper the policy is likely to be, so if your employer offers sickness benefits or you can rely on your savings for a few months, you may want to take out a policy with a longer waiting period.
Family protection insurance
Everyone should consider taking out family protection insurance, also known as life insurance, a type of insurance designed to protect your family from the worst should you pass away.
This type of insurance is especially important to consider, as it can remove financial stress at a tragic time in your family’s life by paying out a lump sum of specified income on the death of the policy holder.
The amount of cover you need will depend on factors such as how much you can afford to pay, whether you have any other cover policies, and the number of people relying on you for financial support.
There are several types of family protection insurance, including whole of life assurance, which pays out regardless of when you might pass away, and terminal illness insurance, which you can claim if you have a terminal illness.
At Roebuck, we are determined to help people protect their family and homes through the best possible advice and guidance.
Your cover should not only be right for you and your situation – it should also be worth the payments you make for it. We can advise on finding the best option.
Get in contact with us to discuss which illness insurance scheme is right for you at 0208 8192407 or by filling in our contact form.