Income Protection for Teachers

How would you cope if long term illness or injury prevented you from working and earning? Looking for Income Protection as a teacher can be a surprisingly simple process and is more often than not cheaper than expected. We would always recommend that you speak with an insurance adviser before taking out your cover to ensure that you secure the right policy terms for your circumstances.

How much does Income Protection for teachers cost?

Income Protection premiums are based on four main things:

• Age
• Smoker status
• Occupation
• Health/Lifestyle Factors

Other factors that can effect the premium are generally focused on those areas that you can control, for example the policy deferment period and cease age etc. In regards to Income Protection all occupations are classed between 1-4 depending on the nature of the job requirements. Class 1 will generally include administrators, office jobs, accountants etc that are classed as low risk jobs, progressing through to Class 4 occupations which would be hands on higher risk jobs such as welders, builders, plumbers etc. Normally the higher the class, the higher the premiums. Teachers normally fall into Class 3 due to the potential for some hands on work and possibly the high stress/pressure related environments. So whilst teachers are not eligible for the cheapest insurance premiums they are by no means subject to the most expensive.

How soon do I need the policy to start paying benefits?

Also known as your deferment period. Policies are usually set up to begin paying out after your sick pay ceases for one primary reason:

• The majority of providers will not pay out alongside employment sick pay benefits.

In all fairness, why would you need to claim for income replacement if you were still receiving sick pay? The shorter the deferment period that you choose, the more expensive the policy premium will be. So there is no financial benefit to paying for a deferment period that does not suit the sick pay package you receive from your employer. The majority of these policies are set up to begin paying benefits immediately after sick pay stops and will be dependant on your own individual contractual benefits. Teachers do usually have enhanced sick pay benefits and it is often possible to tailor Income Protection policies to your circumstances. For example, you can secure an Income Protection policy with a split deferment/staggered benefit to match different levels of sick pay i.e. for example 6 months full pay followed by 6 months half pay.

How long do I need cover for?

The cease age of the policy is usually your expected retirement age, 65 for most people. This can be changed however to coincide with any specific concerns that you have, such as the end term of your mortgage or to keep the policy within your affordable budget. Typically, the lower the term the cheaper the premium. When covering teachers some providers may apply age restrictions to the cease age of policies.

How much cover can I have?

The simple answer is as much as you want, however your monthly cover cannot exceed between 50% – 65% of your gross income; this is dependent upon the insurance provider you select. It is important that if your salary changes becoming higher or lower, that you review your cover as you could become under or over insured. The danger is that if your salary decreases and you become over insured you will continue to pay the policy premiums for the higher benefit that you will not be eligible for and any claim that you make will be capped.

What about inflation?

To prevent the effects of inflation harming your policy you can add indexation to the monthly income replacement benefit. This means that the policy sum assured will automatically increase each year in line with the Retail Price Index; this will usually involve an increase to the monthly premiums that you pay as well. Indexation is applied automatically on the anniversary of your policy unless you advise the insurance provider that you wish to ‘Opt Out’ of the increase each year.

What would I be covered for?

The policy would cover you for anything that prevented you from carrying out your “Own Occupation” as a Teacher. This means that should you be unable to work as a Teacher your policy will pay out. Some policies do offer different levels of cover, such as “Any Occupation” meaning that any claim you make will be assessed upon your ability to do ANY job, not just that of a Teacher. Whilst this option is typically cheaper than the own occupation definition, you must be aware that it will be significantly more difficult to place a successful claim with an any occupation policy. The policy is designed to pay out for anything preventing you from being able to work as a Teacher. It is possible that your medical history or family medical history could result in exclusions to the policy claims set, specific to your individual circumstances.

How do I apply for Income Protection?

We advise that you speak to an insurance adviser on 0800 567 7450 before applying for your Income Protection as we are specialists in Income Protection policies for teachers. This means that we will place your application with the most appropriate insurance provider for your needs (benefit amount, cease age, deferment period) when taking your health, lifestyle and affordability into consideration. Or you can request a quotation online here.