Income Replacement
The income you receive from your policy won’t fully match what you were earning before you stopped working. Typically, you can expect around 50% to 66% of your pre-tax earnings. This is because any state benefits you’re entitled to will be deducted, while the payout from your policy itself is tax-free.
It provides two main benefits:
- Temporary Total Disablement (TTD): Monthly payment if you can’t work.
- Permanent Total Disablement (PTD): Lump sum if you can’t return to work permanently.
Redundancy
Redundancy insurance is a type of short-term protection plan that pays a monthly benefit if you are made redundant involuntarily. It helps cover essential expenses while you search for your next role, giving you peace of mind during uncertain times.
Redundancy insurance provides a temporary income if you lose your job due to reasons beyod your control-such as company restructuring or downsizing. It ensures you can continue paying important bills while you look for new employment.
The Importance of Income replacement and redundancy
Financial Stability During Job Loss or Illness
Provides regular income if you lose your job or can’t work due to sickness or injury, helping you manage bills and living costs.
Customisable Cover
You can choose the benefit amount, waiting period, and payout duration based on your needs and monthly expenses.
Peace of Mind
Offers reassurance that your financial commitments, like mortgage or rent, will be covered even if your income stops unexpectedly.
Different Types of Protection
Income replacement covers illness or injury, while redundancy cover protects against involuntary job loss — some policies even combine both.
Documents Required for Income Replacement and Redundancy
To process your income replacement application smoothly, you will need to provide several documents. These may vary depending on your employment status and personal circumstances
For Income Replacment
For Redundancy
Personal & Policy Information
Policy number, ID (passport, driving license, or National Insurance number), and contact details.
Proof of Earnings
Employed: Recent payslips, P60, and employment contract.
Self-employed / Directors: Tax returns, company accounts, or profit & loss statements.
Medical Evidence (if claim is due to illness or injury)
Doctor’s certificate, hospital reports, or specialist notes.
Bank Details
For receiving payments.
For Redundancy
Redundancy Proof
Official redundancy letter from your employer.
Notice of termination or settlement agreement.
Employment & Earnings Proof
Recent payslips, P45, and employment contract.
Personal Identification
Passport, driving license, or National Insurance number.
Bank Details
For payment of redundancy or related benefits.
Things to Consider
For Income Replacment
For Reundancy
Benefit Amount & Duration
Check how much you’ll receive and for how long if you can’t work.
Waiting Period / Deferred Period
The time between stopping work and when payments start. Shorter periods usually cost more.
Definition of Disability
Understand when the insurer considers you unable to work—own occupation vs. any occupation.
Exclusions & Limitations
Pre-existing conditions, self-inflicted injuries, or certain illnesses may be excluded.
Premium & Affordability
Ensure the cost fits your budget without compromising coverage.
Inflation Protection
Some policies increase benefits over time to match inflation.
Level of Cover
Decide how much of your income you want to protect — usually up to 50–70% of your salary.
Waiting (Deferred) Period
Choose how long after illness or injury the payments start (e.g. 4, 8, or 13 weeks).
Benefit Period
Select how long the policy pays out — short-term (1–2 years) or until retirement.
Type of Policy
Pick between standard income protection, short-term cover, or accident & sickness policies.
Affordability
Compare premiums; higher cover or shorter waiting periods mean higher costs.
Exclusions
Check what’s not covered — pre-existing conditions, self-inflicted injuries, or redundancy.
Find Out Answers Here
It provides monthly payments if you cannot work due to illness or injury, helping you keep up with mortgage payments.
Depends on your policy—usually until you return to work, reach retirement age, or for a set term.
The time between stopping work and when payments start. You can choose short or long waiting periods, which affect premiums.
It pays a monthly amount toward your mortgage if you lose your job due to redundancy.
Provide your redundancy letter, notice of termination, proof of income (payslips/P45), and policy details.