6 income protection myths that could harm your financial security

Posted by / March 20, 2019

6 income protection myths

We can’t all be financial experts. But you should at least be an expert with your own finances. Unfortunately it can be hard to separate the fact from the fiction and the pros from the cons with some financial products.

Income protection cover has helped countless professionals protect their financial security when illness or injury temporarily left them unable to work. Yet some frustrating misconceptions prevent many people from exploring how income protection could benefit them.

It’s time to bust some myths.

Myth 1: “I can’t get income protection because I’m self employed”

Wrong. Self employed people are as entitled as anyone else to income protection. Arguably they could benefit from a policy even more than those who are employed. Without the safety net of Statutory Sick Pay to fall on, self employed professionals are left with the burdensome application process of Employment and Support Allowance (ESA), which provides a maximum of £73.10 per week.

Myth 2: “Income protection is too expensive”

Firstly, what’s more expensive than losing all of your income? Secondly, your premium payments can flex to your personal circumstances and often amount to less than the cost of a couple of fancy coffees per week. Not only that, but with PG Mutual you actually build a financial nest egg for your future during your time with us as a policyholder. That’s because we split our profits with our policyholders each year. Find out more.

Myth 3: “I’ll receive enough support from the state if I am unable to work due to illness or injury”

Don’t bank on it. Let’s take a quick look at the figures. Statutory Sick Pay provides just £92.05 per week, while Employment and Support Allowance provides only £73.10 per week. Would that be enough to cover your monthly overheads?

PG Mutual could cover up to 70% of your gross income while you are out of work. What’s more your cover can  begin on the first day of your illness and lasts until you get better or reach age 65 – whichever happens first.

Myth 4: “It won’t happen to me”

Nobody is invincible. Every year, around 300,000 people fall into the welfare system due to ill health, collectively missing out on £4 billion a year in lost earnings. Do you think those people thought it would happen to them?

Illness and injury can (and does) happen to all types of people: old and young, healthy and unhealthy. It’s those that are prepared for the unexpected who fare best. If you think income protection makes sense, don’t wait until it’s too late.

Myth 5: “They won’t pay out when I need it”

With PG Mutual, that simply isn’t the case. Between 1st January 2016 – 31st December 2018 we paid out on 97% of new income protection claims, with total claim payments of more than £2.55 million.

Myth 6: “My employer will continue to pay me until I return to work”

If that’s the case for you, you’re lucky! Most employers will not continue to pay an employee indefinitely while that worker focuses on recovery – and if that’s the case for you then income protection is a smart option.

Find out more about PG Mutual

Just a few pounds per month is all it takes to secure your finances against the prospect of illness or injury leaving you unable to work. To find out more visit www.pgmutual.co.uk or call our UK customer service team on 0800 146 307.

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