20th August 2013


It's easy to get a bit confused about the difference between Income Protection Insurance and Serious Illness Cover as they both are related to situations that might prevent you from working. They certainly aren't the same though and we thought it important to explain the difference.

Income Protection and Serious Illness cover both provide valuable benefits to people in the event of sickness. However there are sizeable differences between the two and you should check which cover suits you best.

Here's our guide to what the differences are
In some cases it can suit to have both types of cover but the guide below will help you decide which suits you best.

 |   | Serious Illness Cover | Income Protection
|  What benefit do I receive? |  Serious illness cover pays a lump sum to you if you are diagnosed with any of the specified illnesses named in the plan. This lump sum can be used to pay off large loans, pay medical bills etc. |  Income Protection provides you with a replacement income in the event that you are unable to work due to any accident or illness. With this policy you are covered until you can return to work or until retirement age if you unable to return to work.
|  Which qualifies for tax relief? |  There is no tax relief available on Serious Illness premiums. |  You can claim tax relief at your marginal rate on your Income Protection premiums.
|  What about Continuity of Cover? |  Once you secure Serious Illness cover- that cover lasts for the duration of the policy or until you make a claim. A claim will make it very difficult to replace that cover in the future.   |  Income Protection benefit will continue even if you suffer an illness which triggers a claim. Your benefit will continue to be paid to you from the end of your deferred period until you no longer satisfy your definition of disability, you recover, your policy ends, you retire or you die (whichever comes first).
| Is it difficult to get cover? | More people tend to qualify for this type of cover as their occupation is not a factor. | It can be difficult for certain occupations to get Income Protection cover.

Income Protection is best for you if you wish to protect your future from the loss of income due to illness or injury. However if you do not qualify for it then a Serious Illness policy equal to a multiple of your  salary is the next best thing.

Want to learn more?
Check out our Income Protection and Serious Illness cover pages.