Personal Finance

Money - Personal Finance
By: - at January 13, 2013

Do You Need Income Protection Insurance?

Income Protection InsuranceIncome protection (IP) insurance is a great option for employed people to cover their expenses if they become unable to work due to injury or sickness.  This type of insurance makes payments to you that are up to a certain percentage of your salary or income.  When you cannot work because of an injury or you are too sick, these insurance plans are designed to help supplement your income until you can get back onto your feet.  Various Income Protection (IP) insurance providers have various benefit packages with premiums based on a proportion of salary.  The rates depend on the amount of premiums or coverage you are willing to pay for.  You will need to know how long this coverage will protect you from the IP insurance provider and the terms of the policy laid out in contract form.  There are different types of IP insurance providers in many different countries.  You will have to select the best income protection insurance after carefully considering your personal circumstances and needs.

What is Income Protection Insurance?
Income Protection (IP) is designed for those adult working people who cannot work temporarily due to sickness or injury.  The income lost from not attending work is covered by IP insurance.  IP insurance companies make payments based on the amount of coverage guaranteed by the policy.  This policy is good for those workers or employees who tend to become sick often due to job stress or the nature of the work.  Income protection insurance is also a good idea for any worker working in any industry who wants to create a safety net.  Many times workers get sick and find themselves in desperate financial situations where they cannot pay rent or car payments.  This is what income protection insurance is designed for.

Types of Income Protection Insurance
There are generally three types of coverage described below:

Income Protection Insurance
Income Insurance PolicyThis is the most popular form of IP coverage which is issued by life insurance companies.  IP insurance can provide coverage for up to 90% of the policy holders' income or salary, but generally it provides for up to 75% of policy holders' salaries.  As long as the policy holder continues to pay, the insurer cannot cancel the policy.  This is regarded as a great coverage choice and gives policy holders some real benefits that can come in handy when something devastating occurs.  It offers an excellent range of benefits and features that other types of insurance do not provide like assistance with filling up your car at the gas station.  The IP provider is unable to adjust terms of the policy once it has been taken out and terms can only be changed when the policy expires.

Group Salary Continuance Insurance Policy

Many corporate business organizations or firms choose this type of IP insurance policy.  It will usually offer coverage of up to 75% of all employees' income.  This group income insurance policy is usually taken out by employers on behalf of their employees.

Sickness and Accident Insurance Policy

This type of coverage is usually provided at a fixed rate providing for income assistance for a range of sickness and accidents.  This insurance policy can be cancelled by the insurer once a claim has been made.  So this coverage can help the policy holder out during an extremely vulnerable position when they actually need protection the most.  This policy is anyway good for those who work in hazardous environments where illness or injury is to be expected.

Which Income Protection Insurance is the Best?
Insurance TypesWhen it comes to choose the best income protection insurance, you should carefully analyze various aspects of the coverage you are choosing, and how much protection or coverage you actually need.  If you are doing a high-risk job and there are health risks involved you can consider getting sickness and accident Insurance.  If you are worried about losing your job then this kind of coverage might be just the right option for you.  Whichever coverage you end up choosing get to know the terms, conditions, and rates.  After considering all of your options carefully, you will be ready to make an informed decision tailor made for your needs.

Some policies come with extras that you just might not need or a policy with more coverage than you feel is necessary.  Some products you may be interested in may require higher premiums than the competition for the same amount of coverage. So you need to compare many different options and different companies to get the most suitable offer out there.  Make sure to take your time and spend a great deal of your time reading all of the fine print.

Final Words

Income protection insurance is a great option for all adult working people or employees and they should make sure that the kind of policy they choose will be a viable option for them.  The policy should be affordable and provide the amount of coverage necessary.  Many amounts of coverage may seem just right for you but you need to find out if you really need them.  A good option for you will be to compare many different policies and then select the one that will be more appropriate for you.  Look at the benefit promised by the policy and the terms.  Both pieces of information should be laid out in the policy information or explained by the agent from which you are purchasing the policy.

Please write below in the comments on your experience with the different insurance types that have worked (or not worked) for you.


 

 

 

 

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