Settling into your new home as a tenant can be an amazing experience for many people. But what happens if you suddenly find yourself in difficulty? Planning for the future, particularly if you become too ill to earn a living, can have a big impact on your ability to keep up with the rent and stay in your home.
Most employers will provide sick pay that enables you to get over a short period of illness but what if you go beyond that? This could mean, through no fault of your own, that you get into arrears and find it difficult to fund yourself on a day to day basis. Even if you are married, in a couple or have money put by, this can put an excessive pressure on your finances that can be devastating if allowed to go on.
One solution is to take out income protection insurance that makes sure you are able to meet those important bills and stay in your home if the worst happens. It’s something that many of us don’t think about and only when illness strikes and we fall into difficulty do we wish we’d had this kind of support in place.
What Does Income Protection Do?
If you are unable to work for any reason and this period goes beyond the normal statutory sick pay that your employer provides, income protection can, if you have the right policy, protect up to 70% of your income. There are three main types of income protection insurance:
- Accident and sickness cover only.
- Unemployment cover only.
- Comprehensive accident and sickness cover.
In the event that you are unable to work, these policies generally give you a monthly payment to help you get over the period when you are not earning money. You can get policies that cover just a short period such as 6 or 12 months or ones that are designed to cover a longer term up to the age of retirement.
People can choose to buy payment protection insurance for a number of reasons and it certainly provides that safety net you need if something goes wrong. You might just have had your first child, bought your home and taken on a mortgage, you’re self-employed or are about to switch jobs and want to protect your previous work’s benefits for a short while. It’s a useful form of insurance for tenants to consider, particularly if you want to make certain that you can cover your rent if you become ill or unemployed.
As with any insurance policy, you need to find the one that suits your needs and shop around for the best deal. Some payment protection plans exclude certain illnesses, have various excesses and stipulations that you need to be aware of. It might be better to contact a broker who can approach a range of different insurance providers and find the best solution for your needs.
While no one wants to think about illness or unemployment, it pays to have some protection in place that means you don’t have to worry about meeting those bills if something should go wrong.
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