Income Protection Insurance

What is Income Protection Insurance?  Income Protection Insurance, Critical Illness Insurance or Disability Income Insurance would provide you with a continued source of income in the event of long term illnesses or incapacitation.

Why do you need Income Protection Insurance?  Your ability to earn maybe your most valuable asset.

Have you considered the consequences of being unable to continue earning?  If an illness or accident resulted in your being disabled, would you be able to pay your mortgage or rent, your loan repayments, your children's education costs, etc? If you are self employed this may be even more of an issue.

If you were to be disabled as a result of someone else's action, you may be able to sue for damages.  But if you develop a long term illness, or are disabled as a result of an accident that was no one else's fault, you may have no recourse but to fall back on your life savings and hand-outs.

What can be provided?  Income Protection Insurance Policies can pay up to 75% or more of your basic salary until you are able to return to work or reach your normal retirement age.

Income Protection Insurance Policy terms and cover vary, some policies cover you if you cannot perform your normal job, others cover not being able to perform important duties.  A basic policy will pay a regular income, policy extras may also cover nursing care costs.  Some policies will provide cover immediately you are declared unfit for work, cheaper options will delay payments for a period - weeks, months or even years before incomes payments are provided.  Check the policy has no exclusions that you need to be aware of.

Income Protection Insurance Premiums depend on your age, sex, occupation and state of health.  You may need to have a medical before cover and premiums can be established.  It is important to declare any issues that may affect the premiums for instance all past illnesses and family histories should be declared.  Failure to do so may invalid the cover risking a reduced payout - even if you become disabled through an unrelated condition.

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