Income protection policies, whether provided by an employer to employees or bought by individuals, typically cover long term absence and has a waiting period before it kicks in. Such policies are unlikely to cover people self-isolating as they probably won’t be off work longer than the waiting period. However, some policies with a short payment term are designed to kick in with either no waiting period or only a period of one week, and so are likely to cover people who are self-isolating and unable to work.
What products will pay out when I cannot work due to illness?
- Income protection and sick pay style products are designed to pay a benefit to replace a loss of earnings if you are unable to work due to illness or injury for the length of the policy, or until you can return to work, depending which comes first. Typically, there is a waiting period before the policy kicks in. This waiting period can be between 3 to 12 months for long term policies or between 1 to 4 weeks for short term policies. There are some short-term policies that provide cover from day 1 of absence.
Will insurance cover pay out if I self-isolate?
- In some cases they will, but the majority won’t. Insurers will pay out under the terms of their contracts, but policyholders should be clear on the terms of their coverage. Self-isolation is only likely to be covered for those income protection policyholders with a day one benefit or a one week waiting period. These are clearly only intended to cover instances where the policyholder is unable earn an income due to the reasons specified within the policy and where the cover provided kicks in almost immediately, rather than longer-term policies designed to provide an income for long term absence.