What are the disadvantages of income protection insurance?

There are some disadvantages to income protection insurance to be aware of. For example, policies can be costly for people with high-risk jobs or lifestyles, any payments received are subject to tax , mental health and pre-existing medical conditions may be subject to stricter criteria, and your insurer may require regular, ongoing health evaluations or participation in rehabilitation programs if you do ever make a claim .

Is income protection insurance worth it?

For many people, income protection insurance is definitely a worthwhile investment. If you rely on your income to cover your rent or mortgage, to pay for everyday living expenses, or to cover childcare costs, you could find yourself in extreme financial hardship if you were suddenly without an income.

Does income protection cover stress leave?

It's possible that income protection insurance would cover leave due to stress, but it would require a diagnosis from a qualified medical professional as a mental health condition that prevents you from working. It also depends on the policy you choose and any mental health exclusions or waiting periods that are applied to your policy.

What happens if I lose my job with income protection?

Generally, income protection insurance does not cover redundancy or termination. However, some insurers may offer an additional option that pays a portion of your regular income if you are made redundant or your business becomes insolvent - this is sometimes called involuntary unemployment cover.