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July 17, 2019

Income Protection Explained

The Facts, Myths, And How to Cover Yourself

By Heron Financial

Let’s start with the bad news. If your income stops due to injury or illness, your outgoings don’t. That’s just one of life’s cruel truths. 

The good news (phew) is that there’s an answer to this rather bleak reality. If you do happen to suffer a loss of earnings thanks to the aforementioned injury or illness, you will be covered if (and only if) you take out income protection. 

So what exactly is income protection?

As we all know, life can serve us a curve ball and recovery from these unfortunate circumstances can take longer than we expect. Income protection replaces a percentage of your income and can help you and your family with regular household outgoings, relieving the stress and burden that a wage deficit brings.

Getting back into work after such circumstances can be difficult, so we offer income protection policies with a variety of support services to help, regardless of the time it takes you to get back into regular employment.

Here are our top four facts that you may not know about income protection:

  1. 93% of claimants in 2017 got a pay day thanks to income insurance*. 
  2. Income protection starts from as little as £10 a month – that’s less than a bag of crisps a day. Make ours a prawn cocktail, thanks. 
  3. In 2017, 46% of Aviva’s successful claimants were under 40. Income protection covers those on the rise, not just those at the top.
  4. Nearly 1 in 5 self-employed workers incorrectly believe they’re not eligible for income protection. Heron Financial will make sure you’re covered, so you can focus on growing your business. 

*(based on the top 12 UK providers) 

According to the FCA’s Financial Lives Survey 2017, a mere 4% of the population have a form of income protection cover. Such a low uptake boils down to two main reasons: either people believe they don’t need cover, or they don’t trust the insurers to pay out. Whilst only you can really determine if you need cover (we’d suggest having an honest look at your savings, any dependents, outgoings and desired lifestyle), 93% of claimants in 2017  got a pay day thanks to income protection. 

But be warned, there are situations where income protection can’t be paid and non or partial payments are usually due to claims not meeting the policy definition or because the applicant has misrepresented themselves or their situation during the application. 

How we can help

We can assist with the application and demystify the policies for you, helping to ensure that you don’t expose yourself to pitfalls or unexpected problems when you’re at your most vulnerable. 

Some tips for when taking out a protection policy: 

  • check what existing policies you already have (such as death-in-service or income protection from your employer). 
  • make sure all the details you have provided are correct, as this determines what cover can be offered and incorrect information may affect your claim. 
  • Read the policy and note down any bits you’re unsure of so you can get your Protection Specialist or insurer to clarify them in writing. 

If you’re ready to take out income protection, or perhaps you just want to chat with an insurance broker about your options and the associated costs (without being bombarded with sales pitches), you can book an appointment easily and quickly online by clicking here.

Or you can contact us via:

+44 (0)203 195 1982



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