Teachers Income Protection Insurance is a product that exists to help those dealing with misfortunes in their life that is stopping them from earning their usual income.
The premise is simple – if a teacher is unable to work due to an accident, injury, or sickness, the income protection insurance provider will pay them a monthly income amount to help supplement their earnings and pay their bills until they are able to get back to work or until the benefits have reached the end of their term.
Most of those in the teaching profession have significant sick time and sick pay through their employer, sometimes as much as six months at full pay and six months at half pay.
Since this sick benefit will carry the teacher financially for a period of time, it makes an income protection insurance product more attractive since they will be able to opt for a longer deferred period, which in turn will make their premium payments cheaper for the length of the protection policy.
Do You Need Income Protection as a Teacher?
The current government incapacity benefit is only £95.15 a week which, for many people, is not enough for them to survive financially. In addition to the small amount of financial support it provides, it is often hard to pass the stringent testing and be accepted to receive the benefit.
Most of the population in the United Kingdom only has a few months’ worth of savings should they be unable to work and, even with the help of government support, it is unlikely they will be able to meet their financial commitments.
Having the additional financial backing of an Income Protection Insurance policy is a great way to know those important financial responsibilities will be taken care of. For teachers, it is important to check what type of sick pay entitlement they have through their employer – depending on the situation, it could be as few as just a few days of coverage all the way up to a full year of coverage. Knowing this will help the policy seeker to better determine how much coverage and for how long they will need it.
How Does Teachers Income Protection Work?
- Income Protection Insurance policies come in two different types, long term coverage and short term coverage. Long term coverage is a more traditional income protection insurance product, which was once called a “permanent health insurance” policy.
- This type of policy is designed to protect the policy holder’s earnings against the potential risk of injury or illness for the entirety of their career. This policy will pay a monthly benefit until the policy holder returns to work or the term of the policy ends.
- Should the policy holder be unable to work for longer than their policy deferred period, they simply need to inform their income protection policy insurance provider of the situation. The insurance provider will work alongside the general practitioner to assess and evaluate the claim and make sure they are in the best possible position to pay the insurance policy’s benefits to the client on time.
- Short term income protection insurance will generally continue to make income payments to the beneficiary after their claim has been successful. This benefit will only be paid for a pre-determined amount of time, which is usually between 12 and 24 months.
- While this is the general period of time for these short term policies, some income protection insurance policy providers will offer a product that will cover the beneficiary for a period of up to 60 months.
Teachers Specialist Income Protection
Income protection insurance policies can be arranged to meet any client’s needs. An example of this would be their income payments being set up to commence only when other employment-related benefits have stopped.
This deferred period means the income protection benefits the person can receive could be put off from the time the claim is approved to whatever date they have previously set. Often times, extending this deferred period means the cost of the insurance policy is lower.
Additionally, many insurance providers place teachers in what is known as an occupation risk class level 3. On this scale, level four is not a risky occupation and even though being a teacher does not require lot of physical work, the teaching profession has a very high rate of claims for depression of stress related issues.
Because of this, many insurance agencies consider teachers to be at a higher risk of making a claim, which is why they are classified as a level three.
Before making a purchase it is very important to make sure to read the terms and conditions of the policy. When reviewing this information, the most important thing to look at is the incapacity definition that is being used – since teachers are considered to have a higher risk occupation, some insurers will only offer coverage using a “work task” incapacity definition. Insurance advisors will always recommend that policy seekers look for a policy that uses the “own occupation” incapacity definition.
Insurance policies that use the “own occupation” definition will cover policy holders if they are unable to do their exact current occupation. “Work tasks,” on the other hand, means that in order for a claim to be approved, they will need to be unable to do daily tasks like walking, bending over, and going up stairs.
It can often be difficult to get a claim approved using this definition where having the “own occupation” definition means the person making the claim is unable to do their specific job.
Options for Income Protection Insurance for Teachers
When selecting an income protection insurance policy, teachers have a number of options from which to choose. Some of these options include the length of coverage they choose, level of coverage they opt for, their deferred period, and the potential to choose index linking.
Teachers will be able to choose between short term coverage – between 12 and 24 months – or long term coverage – which will cover the policy holder until they go back to work or until the term of the policy runs out.
There is also the option to select the level of coverage. Policies will cover between 50 and 70 percent of normal gross income in terms of monthly salary. Generally, the higher percentage of coverage chosen, the more expensive the policy.
Additionally, the option will be available to choose the length of the policy’s deferred period or how much time will lapse between a successful claim and the payment of benefits – again, the longer the deferred period is, the cheaper the insurance policy’s premiums.
Finally, there will also be an option to choose index linking for the policy. Over a period of time, inflation has the ability to erode away the value of the monthly benefit the policy will provide. Some providers will offer index linking, which will help to increase the policy benefit in line with inflation to make sure the value of the coverage remains the same. It is also worth mentioning the premium payments for this type of policy will likely increase with inflation as well, even if they are fixed premiums.
Need Advice? We Can Help!
The insurance industry in the United Kingdom has come leaps and bounds over the past few years helping to eliminate the jargon and simplify the processes of applying for income protection insurance.
Even with these strides, it can still be difficult to make the right policy choices. For those who still have questions about income protection insurance policies for teachers, our team of professional insurance advisors can help to navigate the confusion and find the perfect policy. Should you need some advice, we are here to help.