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What’s the difference between Income protection (IP) and Payment Protection Insurance (PPI)?
Payment Protection Insurance (PPI) is a very different type of cover to Income Protection (IP) and is designed to meet a very separate need. There has recently been a lot of controversy around PPI, so we thought it might be worth highlighting the main differences.
PPI, also known as accident, sickness and unemployment (ASU) insurance, pays out following injury, illness and redundancy, typically for just 12 months. After that, the payments stop, even if you have a serious long-term illness.
Unum offer Income Protection which pays you a replacement salary if you suffer an illness or injury and are unable to continue working. This then pays out until you recover, or until you reach retirement age and salary so you have an income to pay for all the essentials like your family bills, mortgage and council tax, as well as what’s important to you, such as family treats, holidays or pets.
When considering what type of policy will be right for you, it is always a good idea to seek independent advice. But in many, if not most, cases Income Protection will provide more security for workers concerned about long term illness or injury.
We’ve put together this handy download that highlights the main differences in a clear table. We hope you find it helpful.
From time to time we’ll be using this blog to answer questions from our readers about Income Protection, such as this one. Got a question of your own? Just click on ‘Ask a question’ here and we’ll do our best to answer.
