Income protection insurance provides a steady income in the event that you are unable to work due to sickness or disability. It continues until you return or retire. Permanent health insurance is also known to income protection insurance.
You can claim a portion of your income, but it will not protection-plans replace what you earned before you stopped working. About half to two-thirds (or more) of your earnings from your regular job will be paid to you. This is due to the fact that some money will be deducted for state benefits and the income from the policy are exempted from tax.
If you become disabled or fall ill, income protection insurance payments cannot be claimed immediately. You will usually need to wait at least four weeks before you can receive income protection payments. However, payments may start as soon as two years after your job is finished. You may not be able to get the money immediately as you may receive sick pay from your employer, or you may be eligible for statutory sick pay for up 28 weeks after you quit work.
You can also take out critical illness insurance. Before you make a decision about whether to purchase income protection insurance, it is important that you compare it with other types. These policies can be found at Additional help information.
- Before you sign up for income protection insurance, here are some things to consider
- Ask yourself these questions before you decide to take out income opportunities protection insurance.
Are you sure that income protection insurance is necessary?
You don’t have income protection insurance through your job. This benefit is offered by some employers. If this is the case, your employment contract, handbook, or personnel department will provide details.
Whether you have any other type of insurance that is combined with your mortgage, or another policy which covers serious illness.
Whether you have savings that you can use in place of insurance. You need to be careful about whether savings are something you really want. It is possible that you won’t be able save enough money to pay for long periods of illness. You may also face an additional emergency that could drain your savings, leaving you without any coverage for illness.
This is the best type or illness insurance I can get.
To find the right type of insurance for you, check out all available types. If you are concerned about the price of income protection insurance, consider taking out critical illness insurance. This can be a cheaper option. But, critical illness insurance is not able to cover all illnesses and lasts for a much shorter time than income protection protection. An independent financial advisor can help you determine which type of insurance is best for you.