Understanding Income Protection Insurance
With many households today being supported by two full-time workers, an accident or illness that makes one of the workers temporarily unable to work could be financially devastating to the household. If you’re like many people, you have life insurance to provide for your family after your death, but what happens if you become ill or sustain an injury? Life insurance won’t pay benefits while you’re alive, but income protection insurance will. This type of policy gives you the means to pay your bills while you are recuperation from an accident or illness.
What Is Income Protection Insurance?
This type of policy, also called salary continuance insurance, pays you weekly or monthly for a period of time while you are unable to work. The money is paid directly to you to be spent as you please. Coverage amounts vary, but you can be insured for as much as 75% of your salary or wages. There is a waiting period before your benefits kick in; this period varies, but many begin in as soon as thirty days. While some policies have terms on them, such as a year or five years, other policies will continue to pay benefits until you are 65 years old if you are unable to ever return to work.
There are many benefits to having an income protection insurance policy. One benefit is the peace of mind it offers you by knowing that you and your family are protected if you are unable to work for months or longer. Rather than worrying about how you will pay your rent or mortgage, you can focus on getting well. Another benefit is that you are paid directly, so you decide what to pay. You can prioritize your bills and make sure that the ones that are most important are covered first. With weekly or monthly payments, you’ll have a regular source of income to pay your household and medical expenses with.
Another benefit of income protection insurance is that the benefits continue until you are able to return to work, or the terms of your policy expire. If there are no limits on your policy and you are deemed permanently disabled, then your benefits will continue until you reach the age of retirement. When you receive your benefits, you will not have to pay taxes on them. Another benefit is that once you’ve bought a policy, as long as you pay your premiums, your policy cannot cancel your policy, regardless of any health issues that may arise. In some cases, while you are unable to work and are receiving benefits, your premium may be waived, but your coverage will continue.
Finding a Carrier
Finding an insurance carrier that can provide you with income protection insurance is as simple as a quick search on the internet. You can compare quotes among several reputable companies to find the best coverage for the lowest premium. Once you’ve bought your policy, you’ll have peace of mind in knowing that your income is protected if you become ill or injured.
This guest post was intended to share some tips that can help people in the market for personal insurance. Read more online from companies such as Real Insurance or Wikipedia page on Income Protection Insurance.