Income Insurance - question

Chimpski

Hi there, first post.

I've got income insurance to cover me when I'm off sick as my employer doesn't do sick pay (ssp aside). The thing is, the income insurance covers a maximum of 65% of my monthly salary, am I, legally, able to cover the remaining 35% with another insurer?

Wutang_2

nope - and its 65% of gross (you dont get paid 100% of your gross income)

BBG_Blackpool

The reason it's 65% is to try and ensure that you have an incentive to return to work if you've had to make a claim. If you were able to claim 100% of your gross income, from the insurers perpective, you'll have no incentive to return to work as you're actually finanically better off while making a claim.

65% of gross salary is still pretty good though. I don't know who the insurer is and thus what their policy conditions are, but you may be able to also claim SSP on top of that - which realistically, unless you're earning mega bucks, might not leave you in that bad a position anyway.

dodgyeyes

ive been claiming income protection for 4 years now. initially, ssp was deducted from the income protection payment so you are still only entitled to the 65%.

lisyloo

Did this change recently?
I'm sure it used to be 75%.
My company docs say 75% although it's possible they have not been updated if there was a recent change to the law.

dunstonh

It did change some years back. There is also a difference in what you can go to if you take a personal plan or if the employer provides it. However, the net effect is more or less the same as one is based on net pay and the other gross.

Chimpski

Thanks everyone, I had a feeling it would be the case that the amount was capped at 65%; but had to ask. The fact that it's calculated from my gross salary does mean that I'm not that far out of pocket (provided that it's not taxed as income- ?)

agal

Chimpski wrote: »

Thanks everyone, I had a feeling it would be the case that the amount was capped at 65%; but had to ask. The fact that it's calculated from my gross salary does mean that I'm not that far out of pocket (provided that it's not taxed as income- ?)

PHI payments are tax free.