Would your finances cover you if you were unable to work?
How would you cope if you couldn’t work for an extended period, ask income protection experts PG Mutual.
Nobody likes to think of the unexpected, of course. But a surprising amount of people in the UK would fall upon serious financial trouble in the event of a debilitating illness or injury. In a recent study 30% of people admitted that they had no backup plan in place if they were unable to work.
That wouldn’t be a problem if we were a nation of avid savers. But let’s face it, that’s not the case. In fact the average Brit’s savings would last 32 days before the pot ran dry.
The welfare state is great, but...
Why are we so unprepared? Research by Royal London found that 48% of working private renters would turn to state benefits to make ends meet if they were unable to work for three months or more. And while it’s true that benefits would help, it’s unlikely to be enough.
The actual sum you would receive from out-of-work benefits is just £92.05 per week for the employed or £73.10 for the self-employed. Compare that to an average household spend of £554.20 per week, and it’s clear that the safety net is not without serious holes.
Low confidence in insurers
The same study found that only 4% mentioned income protection as a contingency plan for being off work. Why is that? Well, it could have something to do with the public’s perception of dealing with insurance companies. Surveys have found that 59% of consumers feel that making a claim is ‘daunting, complicated and time-consuming’. Not only that, but consumers estimate that insurance companies pay out only 47% of the time.
Thankfully, the reality beats the perception.
A cohort of those surveyed had actually claimed before, and of those, 71% actually rated the experience positively. Payout rates are almost double the perception, too. Insurance companies often have payout rates of over 90%. And PG Mutual’s payout rate is a pleasing 97% over the past three years, totalling £2.55 million. The top three claim categories being musculoskeletal (26%), infections and flu (22%) and gastrointestinal (14%).
Make the most of your membership
If you want to be prepared for whatever life throws at you, income protection makes perfect sense.In return for a small proportion of your salary each month, PG Mutual will pay up to 70% of your income while illness or injury prevents you from working until you reach age 65.
As an ICAS member you are entitled to 20% off your first two years of cover. Just mention the discount code ‘ICAS’. To get started call PG Mutual on 0800 146 307 or visit find out more online.
About PG Mutual
PG Mutual are a not-for-profit membership organisation specialising in providing income protection insurance for professional people since 1928. As a friendly society, they don’t have outside shareholders, and therefore return any profit to their members.
PG Mutual share their profits with their policyholders. When you join they create a Profit Share account for you, depositing your cut of the company profits each year. You can claim this as a lump sum when you choose to leave the scheme or your policy matures.
This blog is one of a series of articles from our commercial partners.
The views expressed are those of the author and not necessarily those of ICAS.