Income protection insurance policies are a great way of protecting your income if you cannot work because of an accident or illness, and the best part is that its tax free!

An ideal option for self employed professionals, income protection is a necessity for when things go wrong, but the most important part is receiving your money when you really need it. Here we offer you a checklist of advice making sure that your insurer pays up when you need to make a claim…

Published claims rates

Reputable insurance providers are willing to publish their claims rates. Similarly those who do not probably have something to hide. So check to see if your insurer publishes its claims rates as this should give you a hint as to whether it will pay out or not.

Premium prices for certain occupations

Insurance providers are well known for charging more for particular occupations and for smokers of course! ‘Holloway contracts’ offered by Mutual Societies do not incorporate higher premiums for certain occupations as these societies are run by their members. And because Mutual Societies are run by members customers receive a cash lump sum when their policies meet maturity.

Prior medical checks

Many insurers are thrilled to sign you up to an income protection policy. A check through your medical records is often missed in the hope that you never need to make a claim. However if you do need to make a claim, undertaking a medical check can be a lengthy process which can delay getting access to your money. This is one of the most common reasons why claims are delayed.

Find an income protection provider who undertakes medical checks prior to issuing your policy. It can take longer to administer your initial policy but if you need to make a claim you’ll get your hands on your money much quicker and without underlying restrictions.

Length of time to pay out claims

It’s important to know how long you will be waiting before you receive your money. Income protection policies sometimes have a deferment period potentially leaving you waiting months before getting your money. However Mutual Societies offer ‘Holloway contracts’ which don’t have deferment periods meaning you’ll receive your income from the first day of your illness or injury.

Age of insurance company

Finding out your insurer’s history can help you to understand its credibility in terms of its previous claims rates and overall customer satisfaction levels.

David Thompson is CEO of dg mutual – income protection specialists, helping self-employed professionals to protect their income since 1927.