With the new viruses and endemic diseases cropping up in every corner of the world, it is a wise decision to take some measures that can protect you and your family in case you fall ill. Income protection insurance is a way to ensure prosperity even in your darkest days. It will keep paying the bills and redress you from the worries about your loved ones. In case the term is new to you; let us delve in a little further to help you understand the concept of income protection insurance.
About income protection insurance
What is income protection insurance? In case a day comes when you are ill for a considerable period of time or are rendered disabled by some unfortunate accident, you can trust on the income protection insurance to replace a considerable part of your salary. This will continue till you are capable of working again and thus ensure the continuing wellbeing of your family. It is to be noted that income protection insurance is not the same as critical illness insurance, the latter pays out a lump sum at one go, whereas income protection insurance pays a part of your salary on a monthly basis for a pre-defined period of time. The longer the wait, the lower are the premiums for the policy.
What are the coverages?
It covers most of the illnesses that have the ability to render your unable to work for a considerable period of time. But the interpretation may differ in the sense, if you are unable to work at all or just at your current job will vary from policy to policy and also will depend upon the policy you choose. Currently there are three ways in which incapacity is defied and they form the three basic levels of cover that is possible.
What are not covered by an income protection insurance policy?
A list of such cases and “illnesses” are provided in the terms of the policy. Generally these policies do not cover normal pregnancy, self-inflicted injury, pre-existing medical conditions, disabilities or illnesses due to any criminal act(s) and also illnesses due to alcohol or substance abuse. Most of the policies do not even cover illnesses inflicted by war, riots or terrorism.
Who needs income protection insurance?
Only a handful of lucky people who get by on sick pay or government benefits do not necessarily require income protection insurance. Also if you plan on taking an early retirement which will get you your pension early and also have strong financial support from your family you may not need it. However since having an insurance protection policy means you can pay your regular bills, it is the wise choice of most sensible people, especially those who are self-employed.
Will you get your money’s worth?
The returns from a policy will depend upon your circumstances and largely upon your policy. Usually the policies are beneficial because not only do they cover a wide range of diseases, they also have the potential to payout for long periods of time. Income protection insurance is not a luxury; it is a precautionary measure for days you may not be able to work. Judge well and make a wise buy depending upon the premium and and coverage.
