Home

Income Protection Insurance

What is income protection insurance?

Do you know what income protection insurance is? If you never heard the term before, then you should definitely direct your attention towards it, because income protection insurance is a type of policy that can change your life, saving it in moments of turbulence. The policy is quite new on the market, but it is gaining more and more popularity. This policy pays benefits to any policy holder who becomes unable to work as result of an accident or as result of an illness, but it also pays benefits to any policy holder who became the victim of financial cuts and pay reductions. When you lose your job, especially in these times of economic unbalance, when finding a new job is a very difficult task, all you can do in order to pay your bills is to start selling the jewelry you own and to sell other items that might give you a helping hand for paying the mortgage. In the past few years, there have been numerous cases in which people lost their jobs and had to sell their houses in order to move to a cheaper city or they simply lost their houses due to the fact that they were unable to pay the mortgage. Fortunately, income protection insurance offers you now the possibility to avoid all these unwanted situations.

Relevant concepts related to income protection insurance

In order to better understand income protection insurance there are a few relevant concepts that must become familiar to you. For example, ‘’incapacity’’ is the word that characterizes income protection insurance. The incapacity can be defined using four different stages. The first stage of incapacity refers to the own occupation: the incapacity of your own occupation appears when due to an illness or an accident, a person cannot perform his or her own occupation. The suited occupation cannot be performed when due to illness and accident, a person cannot perform an activity in a domain in which he or she was trained and educated (for example, someone was trained to become a skiing instructor and as result of an illness, a career in this field becomes something impossible). The third stage of incapacity refers to the any incapacity: a person suffers from a horrible illness or a physical handicap that does not allow him or her to perform any type of activity. The activities of daily living incapacity refer to an illness that for a certain period of time does not allow a person to perform activities such as cooking, dressing, washing or eating. If you are in one of these situations, then you are eligible for receiving benefits with the help of income protection insurance. However, you should know that any type of income protection insurance you choose, you only receive a certain percentage of your initial earnings; this is referred to by specialists as ‘’benefit limit’’. If you really want to understand how income protection insurance works, then you should know that there also is a deferred period that refers to the time between you depose a valid claim and the time when you start receiving the benefits. Some insurance offices offer a bigger sum during the period when you simply cannot perform any type of activity as result of the illness or the accident, but they also encourage the beneficiary to return to work; in order to do this, they agree to keep paying benefits even though the beneficiary finds a part time job. However, the sums are not as important as during the period when the beneficiary is immobilised to bed. This is called by specialists a ‘’proportionate benefit’’.

 

The huge advantages brought by income protection insurance

Some people are extremely reticent when they hear about income protection insurance, as they look at it as it is just another monthly bill that they have to pay. It is true that you will be paying a certain amount every month in order to be able to be the beneficiary of such a policy, but if you have the bad luck of being struck by an illness or if you have the bad luck of becoming the victim of an accident, the benefits brought by these insurance are huge and extremely important. During the convalescence period, you won’t have to think about something else than at your own health and at how to get better in the shortest time possible. Every single person should understand the fact that the offices that offer income protection insurance should receive attention, as they definitely deserve it. It is great to know that you know have to right to get ill, as until a few years ago, we were almost like robots. If we would have suffered an accident or if we would have become ill, there was nothing to help us. A lot of people had to completely change their lives after an accident or an illness and they had to completely start over, as they had no support during the convalescence period. A beneficiary will receive the insurance under the form of a monthly paying from the moment he becomes incapacitated. Now, the next question is: until when will the beneficiary receive the insurance? Well, this depends on the contract a person signs with the insurance office. Some people might receive the monthly payment until they recover, until they retire or until the early death occurs. Other people will receive the monthly payment until the date agreed by contract. An insurance office gives you the opportunity to concentrate on your recovery, as there is a financial support that you can rely on. The sickness or the accident surely prevents you from performing any type of activity that offers you the possibility to earn a living, so what do you do in such a case? What happens when a person does not have the possibility to earn a living? You won’t have to worry about these situations anymore, because you know have the support provided by income protection insurance.

The responsibilities involved with income protection insurance

Those who think that income protection insurance only bring benefits to the person who decides to take advantage of it are right, but they should also be aware of the fact that there are certain conditions that have to be taken into account. For example, no insurance office will offer you the monthly fee if you became unemployed as result of the fact that you do not properly perform your job. You have to be the victim of an illness or the victim of an accident, so your person faults will not represent a condition that leads to the receiving of the financial benefits. The accidents and the illnesses that occur as result of drug abuse or alcohol abuse, as well as the ones that occur from criminal acts performed by the person who own the insurance will not represent reasons for receiving the insurance. Do not sign a contract and then simply renounce performing your job at your work place, because you will not take advantage of the insurance and do not try to perform any type of antisocial activity, because no insurance office will help you in such a case.

The importance of such a policy

Every single person should contact an insurance office in order to sign an income protection insurance contract as such a contract can really save your life. It is very important to understand what a vital role is played by the insurance income protection in our lives, as we never know what tomorrow can reserve us. You can be perfectly well today and you can become the victim of a horrible accident on your way to work the next morning. However, there are a few details that you have to take into account before signing any type of contract. You should never go to the first insurance office that crosses your way and sign the contract that they have on offer. Now, any insurance office has this type of contracts at the disposal of their customer and there are hundreds of such offices. What you have to do is to check as many offices as possible and to choose the offer that best suits your needs, your interests and your preferences. You have to be extremely careful when you do something like this, as there are numerous offices that do not offer the insurance for certain diseases and conditions. It is best to choose a contract that offers you insurance for a big list of physical disabilities and illnesses. Unfortunately, a person suffering from a mental illness is not eligible for receiving such insurance. This is probably one of the biggest disadvantages of this type of insurance, as the mental illnesses are recognized by the medicine and they require drug treatments. The good news is that some offices are thinking about introducing this type of illnesses on their list of insurance conditions, so you should inform yourself regarding this aspect.

Asking specialized help

As you were reading in the previous paragraph, there are hundreds of insurance providers, so there is a huge range when it comes to the income protection cover offers. In order to choose the right company, you have to first ask and answer some questions, as this will give you the helping hand you need. For example, have you decided what type of insurance you need? Have you decided upon the requirements? These are some very important details of the contract, as they are the ones that can transform a contract into an extremely successful one or into a complete failure. Since you will be paying a monthly fee, at least you should be sure that these are well spent money. The great disadvantage of these insurances is that they usually do not cover the extremely common illnesses and these illnesses usually include mental problems caused by stressful days at work, such as anxiety, depression or stress. This is just one of the few reasons why a person who is not familiar with income protection insurance field should ask specialized help. There are numerous consultants who offer you tips, tricks and advice and who ask a certain sum for the services they provide. Even though you might think that it is not necessary to invest your money in such a service, you should know that it might prove to be a very good investment, as this can help you choose the suitable company for your needs. Don’t imagine that the consultant will come with you at the company that you choose and negotiate the contract for you! This is wrong! The consultant will teach you how to negotiate the contract by yourself! The money spent on such services is well spent money, so do take them into account if you feel attracted by the idea of signing an insurance income protection contract.

The protection offered by the income insurance

There is one huge mistake that people commit when they talk about income protection insurance: they consider it as being just an additional sum of money that they have to spend every month. Well, things are far from being like this! An income insurance contract offers you the financial protection you need when you become unemployed as result of an illness or an accident. The income protection will offer you the safety you need and the certainty that you will be paying your bills while you are ill or immobilized to bed. If you do not have such insurance, then you should know that you are at risk! Even though you think that ‘’this is not going to happen to me’’, you never know what can happen. If you are not sure that you want to sign such a contract, you should then wait a little bit longer and inform yourself about what this really represents. Such a contract is an extremely serious thing, so treat it as it needs to be treated.

Important details about income protection insurance

What details should a person know about income protection insurance? Well, the most important details refer to the fact that an income protection replacement plan is completely different from any other type of insurance plan. This is the reason why you have to thoroughly read it before signing it. Ask as many questions as needed in order to be sure that you will have a plan that really helps you. For example, a beneficiary should ask the insurance officer about the requirements, the expenses, the amount of money that he or she will receive or questions that refer to the time when he or she will be receiving the payment if it happens to be out of work. The monthly sum will actually replace the income while you are sick or incapable of performing certain types of activity. Some people tend to associate income protection insurance with the disability insurance. In fact, these are different, so if you have a disability protection, it does not mean that you also have an income protection. The benefits are completely different, the sums are completely different and the terms are completely different. It is true that income protection insurance also includes disability situations, but the two are not the same thing.

The restrictions employed by an income protection insurance

If you already feel attracted by the idea of signing an income protection insurance contract, then you should be prepared for some restrictions. Once you sign the contract, you should not quit the job thinking that you have a monthly income, as you will not receive it. Which is the reason? That is very simple: the fact that you quitted your job for no serious reason, thinking that the insurance company will pay you. If a person is fired because he or she suffered an accident or lost the job because of the fact that the person became incapacitated represent the conditions that have to be met in order to become eligible for receiving the insurance money. This means that any other reason that does not include accident or sickness does not represent a reason thanks to which the payment is granted. Other restrictions imposed by this type of policy refer to criminal acts, drugs, alcohol or even pregnancy; in case you commit a criminal act and get hurt during it, there is an abuse in the drug and alcohol consumption or you become pregnant, you become invalid for the money granted by the insurance. Some think that the pregnancy should not be included on the list, but the insurance offices think that there are numerous women who plan becoming pregnant, so they sign a contract with the clear intention of taking advantage of the money offered by them. All these insurance offices consider this an abuse coming from the beneficiary, so they decided to include pregnancy on the restriction list. The beneficiary has the obligation to update the office when there are any changes in the employment status, because this means that the policy return to the ‘’valid’’ level and the insurance money are either completely cut or the beneficiary receives smaller sums for a certain period of time. The fact that the benefits are limited to a level that does not cross over a 75% of the initial income represents the way in which the insurance companies support the beneficiary into recovering very fast and into returning to work with the help of another job. These companies sustain the idea that a person should work if he or she is capable of doing this, so this is the reason why there are numerous restrictions imposed in income protection insurance plans.

A few conclusions regarding income protection insurance

I know that not many heard about the possibility of signing an income protection insurance plan, but this type of policy should become more and more popular, as it can definitely change the life of a person who had the bad luck of experiencing difficult situations and the good part is that it changes it for the better. Even though your family history does not point to the fact that you might be suffering from an illness at a certain time, this does not mean that you are safe from this. One can go to bed completely healthy and wake up suffering from something that can completely change his or her life. You never know what can happen to you, so it is a great idea to take income protection insurance into account. I know that a new insurance means more money spent every month, but also think about the fact that if you suffer an accident or if you become incapable of working because of an illness, the bills will not know that you are not capable of earning a living; they will keep on coming, so you have to take some precaution measures in order to be sure that you won’t have to experience impossible moments in your life. If you do not trust the insurance officers, then you can always ask the help of consultants, as they will surely provide you the tips, the secrets, the tricks and the advice you need in order to get a very good contract. You are right to be afraid and hesitant, as there are numerous companies that will only try to take your money away, companies that will not offer you the help you need in illness or accident situations. The consultants will ask money for the services that they provide, but the money will actually be well spent! Signing an incomes insurance protection contract is not the easiest task in the world and it requires meticulous preparations, but once you have a very good one signed, I assure you that you will be more relaxed about your future and the future of the family that you support. Take all these aspects into consideration, put them into balance and I assure you that the balance will suggest the fact that you should have an insurance incomes protection contract!