Income Protection Insurance And Its Benefits

Income Protection Insurance And Exclusions –

The concept of income protection insurance is certainly a new idea. This is a policy aimed at protecting people just in case there is a loss of income due to some major sickness or accidents. However, it is important to note that the policy does not cover loss of income due to dismissal or retrenchment. The benefits are payable only if the insured loses his/her income due to disability. Moreover, in most cases, incapacitation due to substance abuse or self-inflected injury is also excluded. 

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Points To Focus On Before Purchase Of Income Protection Insurance –

1. Nevertheless, in spite of the fact that it does not cover dismissal, it is certainly beneficial for people who have a stable income. Just in case, there is some unforeseen danger in terms of sickness or injuries, this acts as a perfect financial protection. Fortunately, such protection is offered by many well known insurance carriers. One can always do a comparative study of the premiums the insurer charges and the amount offered as benefit. While it makes sense to go for those who offer cheaper alternative, one must also focus on the record of the insurance company in regards to claim payment

1. The amount of benefit is also an important area of focus. The idea is to get the patient back to work.  Hence, most insurance companies offer an amount, which is lower than the income of the insured person, or else he/she will not want to get back to work. Moreover, such payments are mostly made in monthly installments and this too us an added advantage. One can budget one’s expenses accordingly.
2. The deferred period is also another important aspect. In insurance parlance, the time between the submission of claims and receipt of payment is known as deferred period. People with strong finances can look for a lengthier deferred period because that may reduce the premium quite drastically. Indeed, Income Protection and the extra Benefits insurance is beneficial, but one can get the best advantage out of such policies only if it purchased after due deliberation.

Income Protection Insurance – An Overview

With a plethora of insurance products flooding the markets, it has become very difficult for the common man to understand the reason and the need for an insurance policy. A lot of times people make insurance policies just because it is mandatory at the workplace or because a friend/colleague has one and has suggested to buy that policy. This deprives people the opportunity to learn and analyze about the insurance policies available in the marketplace.

Income Protection Insurance – as the name suggests is an important and essential insurance option that individuals can consider when buying a policy. While life-insurance and health insurance are the most selling insurance policies, income protection insurance is equally important as is the life and health insurance. This scheme protects the individual/ individual’s family from any unforeseen circumstances such as health issues or accidents that incapacitate a person from undertaking his/her daily job that helps them earn their income.

When a person becomes incapacitated so much so that he /she cannot cater for their monthly income, it gets difficult for the family to put up without money. Income protection insurance comes in handy exactly during these times. The insurance company pays out money towards salary of an individual for :

1. As long as the person is fit to return back to work
2. Up until the age of retirement, the age of retirement being considered to be 65
3. Until the end of the policy/contract

This would help individuals to run their families and cater to the essential needs like food, house rent etc. While these policies are not much promoted or advertised in the market, it would be a good idea to consider buying one of these because it ensures that life does not come to a standstill, gives the unpredictability and the uncertainty of life. It is always better to be insured now rather than to worry at a later point in time when things go beyond control.

Why I Regret Not Getting an Income Protection Cover

Mark is a contractor who lives in Sydney with his wife and 2 daughters. He restores houses with historical significance to restore them to their former glory. He works alone, often coming home after dark. He loves his job because he gets to tap his creative side and it brings in good income. One time, as he was sanding off the wood carvings on the side of the house, he stepped back to admire his handiwork. He forgot that he was on a ladder and promptly fell about 8 feet down, and was pierced by a portion of the gate.

When Mark got married, his wife nagged him to get all kinds of insurance – life, health, and even income protection cover. She pointed out that his job entailed a lot of risks. He could fall down, get pierced by sharp objects or even get tetanus. “We have two kids, what will happen to us if you die or get injured?”, she cried. He relented, but only got life and health insurance. He thought that insuring his income was redundant, additional premium on something that he will never use anyway.

Rescue came and took him to the hospital. He broke his back and had to rest for several months. His health insurance paid for his hospitalization and rehabilitation. All was well until the mortgage bills came. He was still paying for their house and a Hummer that he loved very much. His wife asked him about his income protection cover. He looked at his wife sheepishly and admitted that he did not get one. “What! all my income goes to child care! How are we going to eat and pay the bills?”, she asked. They asked for leniency from the bank, but was tersely told to sell his Hummer if he wanted to save his house. But he loved it too much to let go. He told his wife that he will take care of the kids while she worked so that they could use her salary for the bills. His disability benefits will help.

He regretted the decision at once. His kids were still toddlers with plenty of energy. He was injured and was ordered to lie down as much as possible. After two weeks with hyperactive kids, his condition worsened. They were forced to put his daughters back to daycare and sell the Hummer. His disability benefit was not enough, barely covered their groceries. “If only I got the income protection policy as my wife suggested,” he thought, “I would not have to worry where he would get money for groceries, utilities and mortgage bills.” He worried a lot about his family which slowed down his recovery. It took him three years to get back on his feet, although the doctors warned him about going back to his old work. At which time he had lost his house, Hummer and most of their appliances in the house.

Mark is a good example of people who should get income protection cover. It is a different kind of insurance. With the right kind of cover, you can still live the way you are accustomed if you are unable to work due to illness or injury. It answers for all those little things you usually do not think of until your ability to buy it is compromised. There is no other insurance that answers this situation. As a responsible provider, you should always be prepared for every eventuality. Your future and that of your family depends on it.

Income Protection Insurance — Do You Need One?

What if you’re ill with a serious disease tomorrow and cannot go to work? Will the sick leave pay or your savings be enough to take care of your living expenses? More importantly, will they be enough to take care of your medical bills? If not, then you need to take a look at some of the best income protection insurance.

Income protection insurance is a long-term insurance policy that is intended to help you out when you cannot work due to a serious illness or injury. This insurance policy has actually existed for a while now and was previously known as long-term disability insurance or permanent medical insurance.

Before you start considering getting income protection insurance, there are certain things that you need to keep in mind. It is not the same as critical-life insurance or short-term income protection insurance. Critical-life insurance pays out all the money at once, whereas short-term income protection covers only a few diseases over a short-period of time; you’ll be paid insurance for a maximum of two to five years depending on the policy.

With income protection insurance, you will be paid a percentage of your gross-salary every month. You can choose the percentage while opting for the policy, but most people just keep it at 50%. You can claim the insurance as many times as you want to, but the policy ends when you start resuming your work, retire or the policy period ends; whichever comes sooner. If you are unable to work and need to claim the insurance money, there is a certain waiting period involved. The waiting period depends on your sick leave and pay, and any other insurance cover.

There are different levels of income protection insurance policies. Some policies even cover disability to work due to psychological stress, while others cover only serious illnesses such as heart attack. The policy also covers the kind of work that you are not able to do; it may be your own occupation, a suited one or any occupation for that matter. You must read the policy carefully and understand it completely before choosing the appropriate one.

Since the income protection insurance covers a lot of illnesses, injuries and disabilities, it is very strict in its requirements and also very expensive when compared to life insurance. Your occupation, age, medical history and even your unhealthy habits such as smoking and drinking are taken into consideration before green-lighting the policy.

Premiums also play an important role in income protection insurance plans. They usually start low if you are young, and then increase over time. You can cut the premiums you pay by reducing the term of the policy or opting for a longer sickness gap before you make the claim. However, this also means that you will be getting fewer benefits under the income protection insurance.
An ‘own occupation’ policy is better to opt than a ‘any occupation’ policy as the chances of making a successful claim are more with own occupation. There are only a few cases wherein you can successfully claim that you are unable to do any kind of paid work.

Income protection insurance is a great way to secure your future against any untoward incidents, but the choice of opting for it depends on your circumstances. Consider the income protection advice given above and always take time to understand the different policies before opting for them.

Ready for the Time Bombs: Why You Need Income Protection

What if you were to stop working today because of a tragic accident or incapacitating illness? Would you still sustain your lifestyle? How about your children’s education? A huge portion of the world’s working population is just sitting lightly above a dim and gloomy poverty. Any catastrophic illness or injury to them would immediately render them incapable of providing for their families and paying their bills.

Moreover, most workers either do not save money or if they save, then the amounts are too insignificant to cushion them from misery in case they stop working suddenly. In fact, many workers simply labor to sustain their lifestyles and rely on their wages to meet their entire monthly budgets. It is a life that is as insecure as that of a person completely dependent on hunting; that is, if you do not kill you do not eat!
So how can workers secure themselves from sudden financial disasters? The answer is income protection insurance. This insurance policy ensures that workers get guaranteed income benefit for using to pay bills and sustaining their lifestyles during disastrous financial crises resulting from inability to work. The opportunity to have an income source to fall back to when you are down is massively exciting and brings a sense of job security into your life.
Besides, the more you are ready to put into income protection insurance the more you will earn when you are incapacitated. Just imagine how hard you work to ensure that your family is always provided with essential needs. What if your situation would suddenly change and you are turned into a beggar instead of a provider? While it may never be possible to provide directly for your loved ones during a cutting sickness, you can guarantee them a good life through income protection insurance.
Probably, you are now complaining about the high cost of income protection, but have you carefully considered the costs of remaining uninsured in the event of a tragedy that keeps you off work? Still, you can explore strategies of reducing the insurance’s premiums and get a cover that you can afford. For instance, you can go for a policy that has a longer period of waiting. A policy with a 90-day waiting period is usually more affordable that that with a 14-day waiting period.

You can also consider whether your employer offers a sick leave and will also continue to pay your wage when you are sick. If such benefits exist, you can take a more affordable policy. Your premium can also reduce considerably if you go for a shorter payment period for the benefit. You can also bring down the cost of income protection insurance by choosing to pay for premiums from your super-account, and not from your bank balance, a choice which allows you to protect cash flow.
In a nutshell, you need to protect your income. Instead of looking for scapegoats for not taking the cover, find reasons to take a substantial cover. In life, it never matters how well you live if you can easily forfeit your standing through an economic shock, illness or loss of a job.To compare some of the Top Insureres in Australia,please visit http://incomeprotectionone.com.au/