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How The Pandemic Could Affect Your Income Protection Insurance

News that 2,450 jobs have been lost in the Arcadia portfolio, following the Boohoo’s aquisition of Dorothy Perkins, Wallis and Burton, is hugely concerning for anyone who works in the fashion retail industry.

While there are measures available to all employees worried about potential loss of income, the pandemic has also affected how income protection insurance might work.

Salman Haqqi, personal finance expert at money.co.uk said: “There’s lots of uncertainty but there are steps employees can take to protect their income.

“Historically there have been common ways to do this – via income protection insurance and redundancy cover. But the COVID-19 pandemic may have changed how these policies work and their availability.

“Many providers have reduced or removed this policy due to the impact of the pandemic. But cover is still available through specialist providers, and it’s possible to get a policy that can cover around 65% of your gross monthly income for a fixed fee.

“Some of these policies can come with a large qualification period so people may be waiting longer for a pay-out. If you do take out a policy to cover you in the case of redundancy, it’s important to keep note of the date as most are fixed for either 12 or 24 months.

“And If you do have an income protection policy, you need to check when the policy started.

“If it was underwritten pre-pandemic, you should be covered if you’re forced to take more than 14 days off work due to COVID-19. However, if you took the policy out since last March there may be a specific clause in your agreement regarding COVID related illness that you need to check.”

For more information on the different types of policy and to get a better understanding of your employment rights, check out the money.co.uk guide to redundancy rights.

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