Ensure Financial Stability for your Family with Superior Income Protection Insurance
People who have been working all their lives may suddenly find themselves out of a job because of an illness or a traumatic accident. With a stable job, the breadwinner in the family is confident that all of their needs are covered. However, when a person’s source of income is compromised, then all sorts of issues crop up. In one instant, finding money to put food in the table becomes a huge dilemma. To everyone’s surprise, the family’s steady source of money to pay the bills is cut off. One day, the family is secure because the breadwinner is enjoying the benefits of being fully employed. The next day, things could turn around without warning.
The consequence of unemployment
In a family that is fully dependent on salaries of working individuals to support their basic needs, money becomes a primary issue when unforeseen events occur. Sick pay is helpful during these times, but the amount provided by the company may not be enough, especially when medical bills accrue. Health insurance usually covers medical bills, but the limits are clear-cut, and long-term care may not be part of the benefits. People who lose their jobs find themselves in a chaotic situation. Nevertheless, there is a way out of this situation. Income protection is a means of protecting the entire family from the negative consequences of unemployment and ensuring a future where they can continue to enjoy financial stability.
A solution to your money problem
Financial woes may be alleviated if there is an income protection insurance policy to rely on in such times. There are three basic types of income protection policies available to working individuals today. These policies provide are coverage for inability to work due to illness, coverage for unemployment, and coverage for lack of income due to accidents. Insurance providers now offer coverage in the form of monthly benefits amounting to as much as 75% of a person’s income. The figure varies depending on the insurance policy holder.
If the entire family can rely on the benefits of a viable income protection policy, then the person who is ill or injured can focus on getting better. In the absence of stress associated with worrying over monthly payments and debts, a person’s body and mind heals faster. In a stress-free environment, there is a higher chance of recovery with the help of medical treatment and rehabilitation.
An overview of insurance payment requirements
Some income protection policies offer a one-year benefit period, while others require a two-year benefit period. Insurance companies usually require a lower premium for the former, when compared to the latter. The two main categories are short-term income protection policy and long-term income protection policy. In the short-term category, the policyholder receives the payout for a limited period (e.g. 12 months). Meanwhile, in the long-term category, the benefits are received by the policyholder until he or she can resume work or until retirement. With regard to the waiting period, 30 days is the typical allotment.
A safety net for the entire family
With income protection, insurance, jobless individuals can continue receiving a monthly tax-free stipend until he or she can return to work. The main requirement for the policyholder is to pay the allotted premium on a monthly basis. Typically, insurance firms cover mortgages, rental payments, utility bills, and expenses related to credit card usage. Some policies provide payment until the person’s age or retirement, if returning to work is not a probable. Families can maintain their current lifestyle even when the person who provides the income is incapacitated. With an insurance coverage that ensures continuity of income, the family is spared the mental and physical stress of agonizing over financial woes.
The latest trends in income protection
Since income protection policies are relatively more expensive than other types of insurance, the industry is trying to develop policies that have better coverage. They are keen on finding ways to reduce the premium payments while still offering comprehensive benefits in order to entice more people into purchasing this kind of coverage. Key players in the industry are also devoting time and resources to market policies in such a way that they are easier to understand. All these efforts are geared towards attracting more working individuals to avail of insurance coverage that provides them with continuity of income when the time comes that they cannot fulfill their responsibilities.
Surveys reveal that the chances of a person being unable to work for a period of three months to half a year is more likely to occur than sudden death. Since disability or sickness is more statistically probable, it is important for employees to weigh the pros and cons of an income protection policy versus a life insurance policy. People who can manage to acquire both life insurance and income protection coverage should think about opting for the latter even when they are already paying for the former.
