Income Protection Insurance And Its Benefits

Income Protection Insurance And Exclusions –

The concept of income protection insurance is certainly a new idea. This is a policy aimed at protecting people just in case there is a loss of income due to some major sickness or accidents. However, it is important to note that the policy does not cover loss of income due to dismissal or retrenchment. The benefits are payable only if the insured loses his/her income due to disability. Moreover, in most cases, incapacitation due to substance abuse or self-inflected injury is also excluded.

Points To Focus On Before Purchase Of Income Protection Insurance –

1. Nevertheless, in spite of the fact that it does not cover dismissal, it is certainly beneficial for people who have a stable income. Just in case, there is some unforeseen danger in terms of sickness or injuries, this acts as a perfect financial protection. Fortunately, such protection is offered by many well known insurance carriers. One can always do a comparative study of the premiums the insurer charges and the amount offered as benefit. While it makes sense to go for those who offer cheaper alternative, one must also focus on the record of the insurance company in regards to claim payment.

1. The amount of benefit is also an important area of focus. The idea is to get the patient back to work.  Hence, most insurance companies offer an amount, which is lower than the income of the insured person, or else he/she will not want to get back to work. Moreover, such payments are mostly made in monthly installments and this too us an added advantage. One can budget one’s expenses accordingly.

The deferred period is also another important aspect. In insurance parlance, the time between the submission of claims and receipt of payment is known as deferred period. People with strong finances can look for a lengthier deferred period because that may reduce the premium quite drastically. Indeed, income protection insurance is beneficial, but one can get the best advantage out of such policies only if it purchased after due deliberation.