Difference Between Income Protection and Mortgage Protection?
Question asked by Shahram Shirazi
What is a common age for an Income Protection policy to finish? Are there any important factors to consider when setting how long Income Protection cover should last?
Unsure what age your Income Protection Insurance should end? Our very own, Ben Brooks, gives us the lowdown on your options and how to decide the length of your policy. Just press play! 👇
Income Protection Insurance is designed to protect your monthly income should you be unable to work due to accident or sickness. One of the main benefits of this particular type of cover, is that the benefit amount can be paid out for many years. In fact, it could even pay our for decades if you have the right plan in place.
When setting up a policy, it makes sense to set a cease age that aligns with the age you expect to retire. In the past it was common for policies to last until age 65. However, as many of us now work beyond this age, some insurers have stared offering cover until age 70.
If you are one of the lucky ones who is planning on retiring early and not working past a certain age, it would be sensible to set a lower cease age on your policy. This is because the longer the term you have, the more expensive your premiums will be. For example a policy with a cease age of 55 will be less than one with a cease age of 65.
The risk of insurers having to pay out during the ages of 65-70 is far greater. This is due to the fact that the risk of suffering from an accident or becoming unwell increases with age. It isn’t unheard of for premiums to rise by over 40% as the length of a term is extended from 60 – 65 years old.
Public sector workers, such as teachers or doctors, often retire at an earlier age. For individuals such as this, many insurers limit the length of cover to age 55 or 60. It’s important to note here though, that this is likely to end as retirement ages start to increase.
It’s always helpful to get some advice from an expert when taking out Income Protection. At Drewberry, we can help you to find the most suitable protection for your specific needs and the best bit is, we offer a fee free service. If you do want to chat further just pop us a call on 02084327333 or email help@drewberry.co.uk.