Income Protection

 

Many people insure the things they feel are valuable – their house, their possessions, maybe even their pets. But for most, the thing they value the most is their income.

If an illness or injury prevents you from working, an income protection policy could provide you with up to 50% of your earned income to help pay the bills while you are too sick to work.

The Gibraltar rental market is growing and people who rent their homes are just as much in need of a financial parachute as homeowners. If you are renting a property how will you pay the rent if you become too ill to work or have a critical illness? Income protection is a type of insurance which provides you with a regular monthly benefit if, because of illness or injury, you are unable to work, resulting in a loss of earnings.


For example: for a 35 year-old, monthly income cover of £1,200 for a ten year period would cost £17.09 per month. The monthly benefit would be paid if the person covered, after a 13 week deferred period, cannot work because they are incapacitated by illness, injury or disability or they are providing full time care for their child who has become incapacitated.


The current legislation in Gibraltar is that an employer shall, within any period of twelve months, allow an employee sick leave on full pay for a total of not less than two weeks, and thereafter on half pay for a total of not less than four weeks within the same period of twelve months.
Do you know how much sick leave your company offer, and what would happen if you were off sick longer and received no pay? How would you pay your mortgage, rental and general living costs?


Further, if you are taxed under the Allowance Based System you can also claim tax relief on the premiums paid for death benefit which may include critical illness cover and income protection if included at outset. The tax relief will be at your upper marginal rate.