A policy that is designed to pay you an income for as long as you are ill and not able to carry out an occupation. Please note that, as with anything in life, there has to be small print (ever tried to read the back of a car hire agreement, let alone understand it!).In the case of Income Protection, you should be offered the opportunity to cover your OWN occupation so that, if you are ill and can't do your job, you will be paid a percentage of your pre-disability income until you are able to return to work either full or part time.

You will be asked to select a "deferment period" which is the time you expect to be paid by your employer, or, if you are self-employed, the period you think you can financially survive on your own resources.

Deferment periods are NORMALLY 4,13 or 26 weeks, but there are policies available that will start to pay you if you are ill for three days or more and they backdate the claim to the first day of the illness.

At the other end of the scale are the policies that defer for 2 years, but they are usually combined with an employment contract where you get full salary for a period of time and then a percentage of your salary for up to 2 years.

Matching your financial requirements to your financial liabilities is an art in itself, and, as in most cases, you will need the help of a professional in selecting the correct policy for your personal situation.

If your employer already offers some form of Income Protection policy, ask if it has a "continuation option" if you leave the company!

Finally, how long do you want the benefit to be paid for? Most policies will pay until you go back to work or you reach a pre-selected age such as 60 or 65. Make sure the cut-off date matches your other financial arrangements!

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