So you have got an income protection policy, what happens when you are ill?

Oct 27, 2015 | IFA Blog

The first thing you or your representative should do is ring your financial adviser or the insurance company direct. We will then arrange for a claim form. You and your doctor(s) complete and return that and we get confirmation that this is a valid claim. There may at this stage be some correspondence between your insurer and your doctors. But hopefully sooner rather than later you will hear that your claim has been accepted.

Do not worry if you recover before the claim commences, but if not  this will ensure that everything is ready to commence payments at the end of the deferred period. If it is a short deferred period, or you have delayed submitting your claim there may be a delay, and the first payment will then sweep up any arrears.

You will now receive your new tax free income for the duration of your illness or until the policy termination age (say 65) inclusive of contractual annual increases. There will be at least an annual review of this which will include reference by the insurer both to you and to your doctor(s) to check that you are still ill.

In addition the good providers (and we only use the good ones) all have support services which they will roll out which will typically help you work with your medical problems and if relevant help towards your recovery. They will also help you through the maze of the benefits system to ensure that you get everything you are entitled to.

You may partially recover and be able to do something but still be below your insured income. In that case a decent policy will permit a return to partial work and top you up to the insured income.

So there you are, you can now claim for however long it may be, recover and go back to work and the policy is still there and you are still insured (you are charged no premiums while the claim is in payment but need to resume when you recover).

You can then get a second bout of whatever it was and you are still covered. Or if you prefer some variety get something completely different and claim for that. There should be no limit to the number or variety of claims during the policy term.

The only warning would be to make sure that you have an “own” or “similar” occupational definition in the policy, avoid “any other occupation”.

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