Updated: September 17, 2019

Can I Combine Life Insurance and Income Protection Insurance?

Need a policy that includes life insurance and income protection? Find out everything you need to know about combined cover in this guide

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: September 17, 2019

According to the Department for Work and Pensions and Department of Health and Social Care, around 100,000 people are forced to stop working following a sickness absence every year.

It’s easy to eschew the possibility of falling ill: even more so to think that a health condition could mean giving up work, or result in your death. But if you have a mortgage to pay or dependents to think about, it’s not something to ignore lightly.

Income protection is often taken out alongside life insurance, and offers additional protection in the form of a monthly income to help cover your expenses if you’re unable to work due to injury or illness.

This article explains the basics of life protection insurance, how combined life and income protection insurance could benefit you, and also touches on life insurance with critical illness and income protection cover.

Why take out a life insurance protection plan?

Life protection cover (also known as life insurance) is a type of product that pays out a cash lump sum to your beneficiaries if you pass away while the policy is active.

It’s designed to offer you peace of mind that your loved ones will be protected financially if you die. This payout can be put towards mortgage repayments, household bills or the cost of childcare.

There are a variety of different policy types, including term life insurance, which provides protection for a set period, and continuous types such as whole-of-life insurance, which, as the name suggests, provides lifetime coverage.

To find out more, check out our comprehensive guide to life insurance.

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What is life and income protection insurance?

Income protection cover is a popular add-on to life insurance, and “life and income protection insurance” simply means that the two products are part of one combined policy.

As well as providing a pay-out in the event of your death, the same policy will protect you against loss of income due to illness or injury.

The monthly, tax-free funds from income protection should continue to pay out until you’re able to return to work. It can be used to cover your monthly outgoings, therefore allowing you and any dependants to maintain your standard of living.

Life insurance or income protection: do I need both?

Whether or not you need both life and income protection insurance very much depends on your circumstances.

For example, if you’re a young working individual without a mortgage or any dependants, life insurance may not be a necessary expense – but income protection could be a consideration, especially if your occupation is deemed high risk.

However, if you’re older, paying off a mortgage and have a partner or children who rely on your income to live, both life and income protection insurance is certainly something to consider.

But before you rush into anything, it’s recommended that you speak to a specialist to compare the cost of combined versus two separate policies – in many cases, it might be more cost-effective to set up each plan individually.

What is life insurance with critical illness and income protection?

Critical illness cover and income protection typically go hand-in-hand with life insurance, and each product is designed to cover different risks. Combined, they will provide you with protection against a huge range of elements.

A three-part combined plan will:

  • Provide your beneficiaries with a pay-out if you pass away.
  • Provide you with an income if you’re too ill to work.
  • Protect you financially in the event of a serious illness diagnosis.

Exactly what is covered by critical illness cover will depend on the terms stipulated in your plan, but the majority of policies cover the most common debilitating illnesses, such as cancer, heart attacks and strokes.

Although many people opt to combine critical illness and income protection as part of their life insurance policy, again, it’s recommended to research how the cost varies if you were to take out three separate products.

Does life insurance with income protection provide redundancy cover?

As a standalone product, life insurance doesn’t cover redundancy – that’s not what it’s designed for. So, if you’re looking for a plan to protect against redundancy as well as illness and injury, you may be interested in unemployment insurance. Also referred to as redundancy insurance, is specifically designed to provide you with a tax-free monthly income if you lose your job.

Or save yourself the legwork and speak to one of the whole-of-market advisors we work with who will match you with the most suitable policy for you.

Ask an expert: is life and income protection insurance right for you?

If you have any questions surrounding life insurance with income protection, or want to know whether a combined policy is suitable for you, feel free to get in touch.

The experts we work with will provide you with advice bespoke to your individual needs and circumstances, so you can rest assured that you’ll be matched with the most suitable, and competitively priced, insurance products on the market.

Fill out our online enquiry form or give us a call on 0808 189 0463. We only work with 5* accredited advisors, don’t charge a fee, and you’re under no obligation.

Ask a quick question

We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in life insurance. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

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FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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