A lot of people would struggle to keep making payments for aspects such as rent, mortgage, and school fees if they lost their income as a result of an accident or illness. An income protector comes in handy as a long-term insurance policy that ensures one receives regular income for a given period. The period can be until one resumes work or until one retires. This excellent insurance policy addresses the dire situation that befalls someone once they lose their income. This article will dive into the issues associated with income protection and factors affecting its cost.
How Income Protection Works
As mentioned earlier, income protection is an insurance policy that provides regular income for those who lost their jobs due to illness or accident. The policy provides frequent payments that succeed one’s income. The policy will pay the insured a given amount of money until they are back on their feet working, die, retire, or reach the end of the contract term. Whichever applies sooner is taken up. In addition, most income protector insurances release about 50 – 60% of the insured’s income when they cannot work.
The income protector insurance policy majorly covers illnesses that render an individual unable to work. This is so for a short term or long term, as agreed in the contract. Therefore, everyone gets to select a type of income protector insurance policy depending on the period as well as the definition of ‘incapacity’.
An income protector insurance policy can be claimed as much as possible, provided the policy is still valid. In many cases, there is a pre-waiting period of four weeks, thirteen weeks, twenty-six weeks, or a year. This is the period in which an insured individual has to wait before the insurance company starts making payments to them. The longer the waiting time, the lower the expected premiums.
What’s the Best Time to Get Income protection?
Most people assume that when they are rendered unable to work, their employer will be gracious enough to provide them with some level of income. However, in reality, this is not always the case. Very few employees support their staff for over a year when they are ill. Despite having savings in one’s account, the loss of regular income can drain it all, leaving people unable to meet their mortgage or rent payments. Therefore, the best time to secure an income protector insurance is now. People do not have to ignore its significance since no one can predict what the future holds. But, having it is one step closer to securing one’s financial stability should one lose their income from being sick or losing their job.
What is the Cost of an Income Protector Insurance Policy?
The monthly premiums that one pays for their income protector insurance policy will depend on the nature of the policy and the client’s circumstances. These policies often cover an array of conditions, illnesses, and situations. Therefore, it becomes necessary to compare and contrast the best policy that meets one’s needs. Typically, income protector costs are affected by a number of factors. These include age, occupation, whether one smokes, the percentage of income to be covered, and the waiting period. Additionally, the range of injuries or illnesses covered and the client’s current health and family medical history contribute to determining the cost of an income protector policy.
On the other hand, a client’s choice to pay a standard premium that the insurance provider can increase as time goes by or a guaranteed premium that is fixed will also determine the premiums to be paid. In most cases, guaranteed premiums cost more than standard premiums in the short term.
What to Put in Mind When Purchasing Income Protection Insurance
When one decides to purchase insurance coverage for their income, there are a few things that they need to think about. Firstly, one needs to be honest about their medical history and select a favorable cover. Secondly, one needs to go through the terms of the contract and read through the small print. Finally, one can always change their mind within a month to receive a full refund.
Income protection has developed over the years to become highly valuable to many employees. With the uncertainties of what the future holds, many people have opted to approach reputable insurance providers such as US Health Group to receive expert income protector services. People do not have to wait for years in employment before they can secure the policy. Therefore, if one needs financial security for unforeseen situations such as losing a job, this is the right policy to take.