If you’re unable to work due to accident or sickness, Income Protection Insurance will pay out a monthly benefit. This benefit would get paid each month on top of any state benefits you qualify for. It would continue to be paid out until you’re fit enough to return to work, or you reach the maximum payout period for your policy.
The benefit amount can be used to replace lost income and ensure you can keep up with your monthly outgoings; outgoings that you might not be able to pay just on Government Employment Support Allowance (ESA).
Claiming on your Income Protection Insurance could affect your entitlement to means-tested state benefits. However, it won’t affect contribution-based ESA (which is based on your National Insurance contributions). As benefit rules do change from time to time, it’s always best to check your entitlements with Jobcentre Plus.
If you chose the maximum payout when taking out your policy, the insurer may reduce this payout by the amount of ESA that you’re claiming. This is to ensure you don’t receive more than the maximum amount they allow / more than your pre-claim income.
If you’re considering taking out Income Protection and want to better understand your options, call 02084327333 or email help@drewberry.co.uk to speak to one of our friendly specialists.
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