Teachers Income Protection Insurance is a product that helps those who are dealing with misfortunes that are 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 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 teachers have significant sick time and sick pay through their employers, 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.
The teacher 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 £80.70 a week, which is insufficient for many people 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.
Click To Compare QuotesMost people in the United Kingdom only have a few months’ worth of savings should they be unable to work, and even with 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, coverage could be as few as a few days or as long as a full year. Knowing this will help the policy seeker 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, once called a “permanent health insurance” policy.
- This type of policy is designed to protect the policyholder’s earnings against the potential risk of injury or illness for the entirety of their career. It will pay a monthly benefit until the policyholder returns to work or the policy’s term ends.
- Should the policyholder not work longer than their deferred period, they must 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 ensure they are in the best possible position to pay the insurance policy’s benefits to the client on time.
- Short-term income protection insurance generally pays the beneficiary’s income after their successful claim. However, this benefit is only paid for a pre-determined time, usually between 12 and 24 months.
- While this is the general period for these short-term policies, some income protection insurance providers offer products that cover the beneficiary for up to 60 months.
Teachers Specialist Income Protection
Income protection insurance policies can be arranged to meet any client’s needs. For example, income payments can be 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 removed from when the claim is approved to whatever date they have previously set.
Often, extending this deferred period lowers the cost of the insurance policy.
Click To Compare QuotesAdditionally, 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 much physical work, the teaching profession has a very high rate of claims for depression and stress-related issues.
Because of this, many insurance agencies consider teachers at a higher risk of making a claim, which is why they are classified as a level three.
Before purchasing, it is very important to read the policy’s terms and conditions. When reviewing this information, the most important thing to consider is the definition of incapacity.
Since teachers are sometimes 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 defines “own occupation” incapacity.
Insurance policies that use the “own occupation” definition will cover policyholders if they cannot perform their current occupation.
“Work tasks,” on the other hand, means that for a claim to be approved, policyholders must be unable to perform daily tasks like walking, bending over, and going upstairs.
It can often be challenging to get a claim approved using this definition, where having the “own occupation” definition means the person making the claim cannot do their job.
Options for Income Protection Insurance for Teachers
When selecting an income protection insurance policy, teachers have several options.
Some of these options include the length of coverage they choose, the level of coverage they opt for, their deferred period, and the potential to select index linking.
Teachers will be able to choose between short-term coverage—between 12 and 24 months—and long-term coverage, which will cover the policy holder until they return to work or until the policy’s term runs out.
You can also 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 the percentage of coverage chosen, the more expensive the policy.
Additionally, the option to choose the length of the policy’s deferred period or the time lapse between a successful claim and the payment of benefits will be available.
Click To Compare QuotesAgain, the longer the deferred period is, the cheaper the insurance policy’s premiums.
Finally, the policy will also have the option of index linking. Over time, inflation can erode the value of the policy’s monthly benefit.
Some providers offer index linking, which increases the policy benefit in line with inflation to ensure the coverage’s value remains the same.
It is also worth mentioning that the premium payments for this type of policy, even if they are fixed premiums, will likely increase with inflation.
Need Income Protection Advice? We Can Help!
The insurance industry in the United Kingdom has advanced dramatically over the past few years, helping to eliminate the jargon and simplify the process of applying for income protection insurance.
Even with these strides, making the right policy choices can still be challenging.
For those who still have questions about teachers’ income protection insurance policies, our professional insurance advisors can help navigate the confusion and find the perfect policy.
Should you need some advice, we are here to help.