Answered by Tom Conner
Income Protection length of cover options
Yes, absolutely, that is the one of main benefits of an income protection plan over a payment protection policy. For serious medical conditions 12 months of cover usually isn’t anywhere near enough. On long-term plans average claims lengths are usually measured in years, not months.
Insurers used to set the maximum age the plan could run until at age 65 as this was ‘the’ retirement age. However, as we are starting to work later and later many insurers will even offer cover up until age 70 now. It makes sense to set the policy termination age equal to the age you expect to retire.
Thus, with income protection cover your lifetime earnings can be protected. If, for example, you were off work for 5 years the plan would payout every month for 5 years (less your chosen deferred/excess period). Essentially, the policy continues to payout either until you are well enough to return to work or you reach the retirement age set on the plan (i.e. the policy termination age).
Aligning your policy end date to your expected retirement date
If you expect/plan to retire earlier than 65 or 70 years of age then it is perfectly fine to set the policy termination age earlier. Given that the chances of becoming ill are relatively higher post age 60, bringing down the termination age of the plan can lower the monthly premiums significantly.
Frequently Asked Income Protection Insurance Questions
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