Most professional people in the UK will hold a number of insurance policies. Whether it’s for their car, the contents of their home or even life, most people are aware of the benefits of protecting the things that are most important to them.
With this in mind, it is surprising to discover that many people in the UK, in particular those under the age of 25*, do not have the most essential type of cover – income protection insurance. By paying into an income protection plan, you are entitled to a regular income if you were to lose your income due to an illness or injury. It may appear to some to be an unnecessary addition to the other policies that they hold; however, if they were to end up on long-term unpaid sickness leave, many people would have no means to pay for these policies – never mind the bills, mortgage, transport etc.
When a person finds themself off work due to a serious accident or illness, they may assume that their employer will pay them a full-time salary. However this is often not the case, many companies not having a fixed sickness policy in place – meaning that if a person is unexpectedly taken ill or injured, they could find themselves with just the minimum state sickness benefit to survive on, and no way of taking out cover retrospectively.
Income protection insurance is often confused with life and critical illness cover. However, life insurance only pays out a cash lump sum when you die – so, for example you might want to ensure your mortgage is paid off or to leave behind money for your family to live on. Critical illness cover is similar to income protection, but instead of providing a regular monthly income, it only pays out a cash lump sum if you're diagnosed with one of a number of listed critical illnesses.
Instead, income protection is designed to cover a wide range of illnesses or injuries, where the individual has survived, but requires a regular, long-term replacement income to maintain their lifestyle, pay their bills and cover the cost of paying any other insurance policy premiums whilst they complete their recovery.
PG Mutual are a not-for-profit, mutual, member-driven society who specialise in healthcare income protection and having looked after healthcare professionals since 1928, are experts in income protection whether you are an employee, a business owner or a locum. Best of all, as a Mutual, they give any surplus back to their members, meaning that as you pay into your policy you also build up an investment element for your future.
For more information about PG Mutual, please call 0800 146 307 or visit www.pgmutual.co.uk.
*LifeSource, February 2010
PG Mutual is the trading name of Pharmaceutical & General Provident Society Ltd.
Registered office: 11 Parkway, Porters Wood, St Albans, Hertfordshire AL3 6PA.
Incorporated in the United Kingdom under the Friendly Societies Act 1992, Registered Number 462F.
Authorised and regulated by the Financial Services Authority, Firm Reference Number 110023.
Author profile: PG Mutual
PG Mutual is a specialist provider of income protection insurance solutions for healthcare professionals and businesses since 1928. They provide tailored cover that allows an individual or their employer to pay a set amount per month for a plan which will pay out a regular income should the policy holder have an accident or fall ill, and have to take long-term sickness leave.