Good news – more people are putting protection policies in place
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Good news – more people are putting protection policies in place
New figures from technology provider Iress*, show income protection sales via its software increased 50% in the first quarter of the year. This is heartening news and shows that more people are aware that they need to protect their financial future by putting plans in place that could be a lifeline if the unexpected should occur.
Income protection policies
Whilst you might have enough funds to tide you over for a short time, you could soon
find that paying the household bills was a struggle. These policies are designed to pay out if you’re not able to work and earn money due to illness or injury, and, in some cases, forced unemployment.
The maximum amount you can claim is usually your net monthly earnings after tax, minus any state benefits you may receive. This could be around 65% of your gross earnings and it’s usually tax-free. Policies pay out following your chosen deferred period, typically between four and 52 weeks, and can continue until you return to work, or the policy expires at the end of a fixed period.
*Iress, 2019
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. If you withdraw from an investment in the early years, you may not get back the full amount you invested. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency.
Information is based on our understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.
Tax treatment is based on individual circumstances and may be subject to change in the future.
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