1. What is Income Insurance?

Income insurance provides financial protection by replacing a portion of your income if you're unable to work due to illness or injury. It helps maintain your standard of living during difficult times.

2. How Does the Calculator Work?

The calculator uses the income insurance formula:

Where:

• \( Income \) — Annual income in GBP
• \( Rate \) — Insurance rate as a decimal

Explanation: The premium is calculated by multiplying your annual income by the insurance rate percentage (expressed as a decimal).

3. Importance of Income Insurance Calculation

Details: Calculating insurance premiums accurately helps individuals budget for protection costs and compare different insurance offers to find the best value coverage.

4. Using the Calculator

Tips: Enter your annual income in GBP and the insurance rate as a decimal (e.g., 0.025 for 2.5%). Both values must be valid positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What factors affect insurance rates?
A: Rates vary based on age, health status, occupation risk level, coverage amount, and policy terms.

Q2: How much income replacement is typical?
A: Most policies replace 50-70% of pre-disability income, subject to policy limits and waiting periods.

Q3: Are premiums tax-deductible?
A: In some countries, income insurance premiums may be tax-deductible if the policy meets certain criteria.

Q4: What's the difference between short-term and long-term coverage?
A: Short-term typically covers 3-6 months, while long-term can cover several years or until retirement age.

Q5: Should I get income protection insurance?
A: It's recommended if you have dependents, limited savings, or would struggle financially if unable to work.