Income Protection Insurance
This insurance policy protects you when you are not able to work due to some long-term illness or any injury caused by an accident. This insurance gives you cover until your health is recovered and you go back to work or till you retire. It is a long-term income protection insurance also known as permanent health insurance. It provides tax-free income protection and could continue to payout till you return back to your job or until you retire. This fulfills your needs in the state of being no longer in employment due to sickness or accidental injuries. So it all depends on getting the right insurance policy as per your ongoing life circumstances.
Role of Income Protection Insurance
Income Protection Insurance is influenced by various factors such as gender, age, occupation, and smoking status. The cost of Insurance may differ according to the occupation of the individual and also on the state of illness or injury. The type of job you do plays a major role in determining the level of cover you will be getting. It also depends on your health and whether you smoke or not. The premiums will be high as per your health reports. Some of the insurance company also divide the job type into different categories. The benefits of the insurance are given monthly. These benefits or payout helps in paying the monthly bills, mortgage payments and replacement of income. Many Insurance Companies provide tax-free payments up to fifty and sixty-five percent of the gross salary. And some may offer up to seventy-five percent. But this cover may not include redundancy.
Who can take the benefit of Income Protection Insurance?
Single People: For these people, income protection insurance can help and provide peace of mind with financial security.
House People: The payout given for by this insurance may support your family and their daily needs if you are suffering from long time sickness or injury.
Employed People: You may suffer a loss of income when you are unable to continue your job due to long-term illness or accidental injury.
Self Employed: Long-time sickness may reduce the source of income and so in such condition monthly payout given by the insurance company is very beneficial for your family.
Types of Income Protection Insurance
The monthly premiums may depend on the type of income protection insurance. So it is important to know about the benefits you get from the type of insurance you select.
Long -Term Protection: This type of insurance offers you long-term payout when you are no longer capable to perform your job duties due to long-term sickness and accidental injury. The benefit of this insurance policy is that you will receive the monthly cover until and unless you recover from your illness and return back to your work or job and also till you retire or you are dead. So, in that case, medical examination tests are also taken by the Insurers.
Short-Term Protection: Like long-term income protection, short- term protection does not offer you cover till you recover from your health issue and get back to work or until you retire or you are dead. It provides you a fixed amount of maximum payout between one to five years anywhere of the policy.
Accident, Sickness and Unemployment Protection: This insurance is recommended for those people who are very much concerned about how they will survive if they are jobless or come across an accident or suffer from an incurable disease or sickness. This insurance totally differs from the long-term and short-term income protection insurance. Because despite having an illness or accidental injury or unemployment it allows to get a specific plan and repayments to continue from a few months to two years. In this insurance, the monthly premium rolls on from month to month. The cover plan also depends on your mortgage and other outgoings.