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/