I don’t get sick pay so I want to protect myself with income insurance for accident and sickness but in the quotes it says ‘payment period’. I’m not sure what this is, could you explain?
The ‘payment period’ is the maximum length of time that your policy will pay a monthly benefit should you have to cease working due to illness or injury.
It is important to note that this is for a continuous claim. In other words, it is still possible to make other claims on the plan at a later date, say if you recover, return to work and are unfortunately ill once again, but it is only possible to claim for up to the maximum payment period in one single claim.
To claim again for the same condition you would usually need to return to work for a period of time, which is typically 6 months long.
With Income Protection cover you have a number of different options. Typical payment periods are as follows: 12 months, 24 months, 60 months or until the end of the policy life (i.e. it does not restrict the claim length).
For the last option (what are known as long-term plans), the end of the policy is typically aligned with your retirement age.
With Income Protection it is common to set the term length of the policy equal to either your expected retirement age or the end of a mortgage.
For a policy with a payment period to the end of the policy life it means that a claim could run all the way until retirement if you were unable to return to work.
Given that one leading insurer, Liverpool Victoria, published claims data showing that their average claim length was more than 7 years long it is usually best to have a policy that doesn’t limit the payment period (i.e. it could pay out until retirement).
Naturally, the payout length may depend on your budget as the longer the payment period the higher the monthly premium charged by the insurer.
To see various options for yourself you can get an instant online quote here or speak to one of our advisers on 02084327333.
Drew was incredibly helpful all the way along and very responsive and patient with any questions I had (which were many). He was able to get me a much better deal on my new health insurance than I had been able to get online. A success all round!