Income protection often falls into the, “It won’t happen to me basket”, but what if the unthinkable does happen and you are unable to make an income, provide for your family or make your mortgage repayments?
Whether you fall ill, injure yourself or lose your job – unexpected and unplanned for circumstances arise all the time, so wouldn’t it be better to hope for the best but be prepared for the worst?
How does income protection insurance work?
If you find yourself in the unfortunate position of being unable to work due to injury or illness, income protection insurance will cover your income.
The pro – financial stability
Life sometimes throws a spanner in the works so having income protection in place will give you the peace of mind to know that your income will be covered if you find yourself unable to work.
For the self-employed or small business owners – who rely heavily on their businesses as a sole income – having this extra protection could protect them and their business in case of unexpected injury or illness.
The con – regular financial outlay
Like all insurance, it may not feel valuable until a crisis arises and if you are fortunate, you will never need to make a claim. But in the meantime, you will have to make regular insurance payments to keep your policy active.
The cost of income protection insurance varies depending on the insurer and the policy you choose. Try to find one that can tailor to your needs so you aren’t paying too much but are covered for the amount and the benefits you think you would need, in case of the unexpected.
Types of protection
Every income protection insurance policy will have different benefits, disability definitions and terms and conditions – so it’s important to compare a range of insurance policies to find one that has you covered for everything you may require.
Most income protection policies will cover up to 75 percent of your gross wage for a maximum period. The period of income cover will depend on your policy.
There are different levels of cover available, with varying costs, so do your research before committing to one insurance agency or policy.