Workforce at risk despite sick pay rise
The 85p increase – which comes into force this Saturday (6 April) – will see SSP go from £85.85 to £86.70 a week. With the average weekly expenditure for a family in the UK estimated to be £484, many households would not be able to cover the cost of their financial obligations without their usual salary.
Ian Smart of Bright Grey, a protection provider, said: “Without the income of a primary breadwinner many could see costs spiralling out of control, even when factoring in other benefits they might be eligible for – particularly when you consider that SSP is only available for 28 weeks.”
Despite this – and with the Government still making cuts to public spending – very few people have any form of safety net in place to ensure real protection in the event they had to stop working for a prolonged period of time.
Bright Grey found only 6% of people would consider buying insurance an immediate priority.
Peter Hamilton, head of retail at insurer Zurich, said: “Most people assume they will be covered by the State or their employer. But the reality is not enough are in good employee schemes.”
Only 1 in 10 workers have access to income protection, according to Zurich research.
Hamilton continued: “People need to understand that going from a good salary to relying on SSP would make a material difference to their lives.”
Ten top tips for buying and claiming on your income protection policy
1. Complete your IP application honestly providing all information about your medical history and pre-existing medical conditions – withholding information at this stage may result in a later claim being declined
2. On your application, provide an accurate description of your job role and the tasks involved. Also remember to update your insurer if you change jobs as this may affect your risk profile and monthly premiums.
3. Do you have other insurance policies that pay out as a result of incapacity or as a result of illness or injury – for example benefits from your employer. Some policies will take these into account when it comes to claim stage so make sure you consider them so you can determine the correct level of benefit you need and the premium you’ll pay.
4. It might sound obvious, but make sure you stick to your regular premium payments. Falling behind may result in your cover being stopped.
5. Be honest about your alcohol intake and smoking history – including nicotine patches, gum and other substitutes.
6. Read your policy thoroughly so that you know what conditions you are covered for and which are excluded.
7. It is always a good idea to take expert advice from a Financial Adviser. Protection policies can be complicated and an adviser will help you choose a product that best suits your needs.
8. Make sure you know if your IP premiums are guaranteed throughout the policy, linked to age or inflation, or reviewable so that you can budget accordingly.
9. Check what a potential insurer might offer in terms of ‘back to work’ support – for example counselling or physiotherapy might be available.
10. It is important that you understand your potential insurer’s definition of disability as there are many versions. These include an inability to do your usual job or any job (or occupation) or activities of daily living or daily working – such as dressing yourself or holding a pen. As a rule of thumb, own occupation policies are better as they will pay out if you are unable to do your usual job.