Income Protection Insurance
Being too ill to work is likely to affect your earnings and therefore your ability to meet your ongoing expenses such as your mortgage or rent, utility bills, food and extra medical bills.
Income Protection Insurance is designed to pay you an income should you be unable to work due to illness or injury, resulting in a loss of earnings.
Under an income protection policy, you pay regular premiums to an insurance company and, in return, they agree that – subject to certain conditions – they will pay you a benefit if you are unable to work due to illness or injury.
Imagine you were unable to work for 2 years due to illness or injury – how would you meet your bills? What effect would it have on your savings and investment goals? How would you support your family? What if you were off work for 5 years? What if you could never work again?
At the heart of an income protection policy is the definition of disability and each insurance company has its own. Which definition is most appropriate for you will depend on your personal situation (eg. occupation, employment status).
An Income Protection policy has three key elements to it:
- Waiting period – this is the amount of time you have to be off work due to sickness or injury before payments are due to you. Waiting periods typically range from 14 days to 2 years.
- Benefit amount – the amount that will be paid by the Insurance Company when you satisfy the conditions of claim.
- Benefit period – this is the maximum period that benefits will be paid for – this can be as short as two years, or up to an agreed age like 65.
If you would like to review your Income Protection needs or would simply like a further explanation of how it works, Contact Us to arrange a no obligation analysis of your current situation.
