I am seriously considering Income Insurance for myself. I understand all the benefits but I’m worried that if my circumstances change in the future I may not need to cover so I want to know if I’m tied into to the policy at all?
No, not at all, insurers understand that your circumstances change over time. For example, you may go from being self-employed to working for a company that provides group income protection. For this reason, it is usually just 30 days notice if you need to cancel your plan.
The most important point with long-term income protection policies (sometimes known as permanent health insurance) is that the insurer is tied into the policy, but you are not. Thus, if the plan runs up until age 65, say, then the insurer is contracted in to provide you that cover up until that age.
Making changes to your income protection
If your circumstances do change it is best to get back in touch with your adviser as it may just be the case that your policy needs altering rather than cancelling.
For example, you may move to a company that doesn’t provide Income Protection (usually only large companies provide this benefit and not normally to all staff) but may provide three months of full sick pay, in which case you may want to alter the policy so the deferred period aligns with this sick pay entitlement.