Income protection insurance (often called permanent health insurance) is an adequate long term insurance policy designed to assist you if you’re sick or injured and unable to work while you’re ill. It ensures that you keep getting a regular income during times when you’re not able to work because of illness or injury. This sort of income protection is particularly important for married people who have one partner who’s sick or incapacitated and unable to work, and it is also useful for people with disabilities or in certain circumstances who would otherwise struggle to find and afford the sorts of jobs available. While this kind of income protection can obviously save a lot of money for you over the course of your working life, you do need to be careful how you go about buying it.
There are two sorts of income protection – income replacement and critical illness insurance. Income replacement pays your lump sum should you become unable to work after a year. Critical illness insurance pays a monthly income for a specified number of months during critical illnesses. If you’ve got either one of these two, you need to consider carefully which one you take out. Your circumstances and the state of your health can make a big difference to what you get from income protection insurance.
The level of income protection you take out depends largely on your income, your family circumstances and your age. The benefits you get depend very much on the amount you earn, but your insurance provider may set a maximum income level for your Disability Insurance and Critical Illness Insurance policies. These levels can vary considerably, so you should always shop around for the best deal on income protection. The level of income protection that you take out also depends on whether you take out any other income protection policies. These include such things as savings accounts, retirement benefits and investments, life insurance and some kinds of investment accounts.
You can usually only claim for income protection if you’re working. This means you must be in employment for the period you’re claiming. However, you may be able to claim for short-term income protection policies, which pay benefits when you’re between jobs or on short-term leave.
Short-term policies pay benefits to the individual for a specified period of time if you’re unable to work due to illness or accident. These can be very useful, particularly if you have a significant medical issue that prevents you from working. However, they’re not suitable for people suffering from long-term sickness or those who are too old to take out income protection. If you claim for short-term income protection, you’re usually only able to claim for an extra income for six months. If you’re still in employment at the end of the twelve month period, you may be able to claim for long-term income protection. This means that you would receive more money throughout the year, but you would have to take out the same cover for twelve consecutive months each year.
There are several things you should consider before you decide to take out income protection. The cost of premiums is one thing that you should bear in mind. If you can find short-term or temporary insurance that’s at a cheaper rate of premium, you could be better off. However, there are other things to think about as well. If you’re looking for a cheaper policy that doesn’t offer lifetime cover, then this may not be the best option for you. If you want lifetime income protection, then you could consider taking out a policy that pays out for a specified amount of time and doesn’t vary as a result.
Another factor you need to consider when comparing short term insurance premiums with permanent disability benefits is your personal circumstances. In most cases you’ll find it easier to get ill than to get injured and you’ll find it harder to get injured while on employment. This means that your chances of getting ill are lower and you may have to borrow more money from your employer than you would otherwise. As well as this, you may have to accept an increased level of pay for illness or injury. You might also have to take more sick days than usual due to your employer’s policies. On the other hand, if you were unable to work for whatever reason, you would have no income protection and would have to find the money yourself.
In addition to comparing short-term policies with permanent disability benefits and illness benefits, you may also want to compare how much income protection you get. While you might think that you get a lot of coverage for a relatively cheap premium, you might actually be better off saving the money. There are several policies available that give you just as much income protection as traditional life insurances, yet you save a lot of money by not having to take out life insurance. Some people don’t really understand what life insurances are all about. They end up with a policy that gives them less protection for their debts and financial needs than they need and that they just can’t afford.