However insurers will often insist on retraining for long-term claimants if
they are unlikely ever to be fit enough to return to their original occupation.
This is one of the bones of contention between claimants and insurers.
Claimants sometimes feel they are being forced down a career route they do
not favour whereas the insurer insists they are helping in a crucial
rehabilitation programme.
WHAT IT COVERS
Income protection pays out for conditions such as chronic back conditions,
stress-related illnesses and any illness or condition that prevents a claimant
doing their job.
So if someone suffered a heart condition or stroke and was unfit to work,
they would be paid around 65 percent of salary up to the point that medical
opinion felt they were fit to return.
Income protection is entirely different from critical illness cover which
pays out one lump sum -- not an income. Fitness to return to work or otherwise
does not come into the equation.
Income protection premiums are typically based on employment, age, smoking
status, sex and general health, with those in professional, office-based jobs
generally paying less than those in physically demanding jobs such as builders.
Brian Cannon, a self-employed builder from Hitchin, Hertfordshire, for
example, found it impossible to get cover.
"My profession is in the higher risk category so the premiums are loaded
anyway," he said. "But being self-employed is a bigger problem because without
at least a couple of years proof of earnings, insurers won't touch you."
Cannon added: "The irony in all this is that us self-employed need more
income protection than anyone else. There is no employer to help us out, but we
find ourselves in the worst position of all."
But Karen Small a marketing manager from Chichester, had a policy with Unum
Provident which she said helped her during a very difficult period.
"I had a chronic back problem which required surgery on a disc. I had an
eight week deferral period in my policy but after that I received regular income
protection for the next year and a half without any problem.
"During this time I was helped in my rehabilitation programme from both my
employer and my insurer and eventually returned to my job."
Small added: "I think if I had not had income protection in place I would,
out of financial necessity, have returned to work too early. In reality, when I
was given the all clear by my doctor, I returned to work stress-free and have
felt fine ever since."
PREMIUMS
Premiums on income protection vary depending on age and health.
For a 30 year old male, non-smoker in good health and in a low risk, class 1
occupation, for 1,000 pound per month benefit until age 60, the premiums quoted
by Liverpool Victoria and Friends Provident are 7.70 pounds and 10.16 pounds a
month respectively.
The premiums for women by the same insurers are higher at 15.18 pounds and
15.47 pence respectively.
For a 40 year old male, non-smoker the premiums quoted by Scottish Provident
are 21.28 pence and for a female 32.25 pence.
Statistically women are more likely to suffer illnesses during their lifetime
compared to men.
