Income Protection

 

Income Protection which is also known as Permanent Health Insurance provides you with a tax free monthly income if you are unable to work due to an illness or disability.You can insure up to 50%-60% of your gross monthly income (depending which insurer you choose) and the monthly benefit will pay out until you return back to work, reach your selected retirement age, or die (whichever comes first).

 

Income Protection Insurance premiums are calculated on your occupation, age, health, estimated retirement age and the amount/level of cover you choose. When applying for Income Protection insurance you will need to select a deferment period - the length of time you will need to be off work before you can claim. This is usually 4, 13, 26 or 52 weeks. You can even choose a deferment period of one day, which is fantastic for the self employed, though the longer the deferred period, the less your monthly premiums will be.

 

For example, if your employer pays you sick pay at full salary for six months in the event of illness or accident, you would probably wish to choose a deferred period of 26 weeks before receiving your insurance benefits, thus making the premiums less costly than for a shorter deferred period Income Protection can provide you and your family with financial peace of mind if you are unable to work due to illness or accidental injury. You won’t have to worry about how long your employer will continue to pay you and you won’t have to depend on state benefits.

Do not confuse Income Protection Insurance with Payment Protection Insurance, which is a short-term policy where benefits are usually only payable for up to 12 or 24 months maximum.