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Protecting Your Income With Income Protection Insurance:
By Janice Mbui
Who would your family turn to if you weren't able to work due to an illness, injury, or sickness? Where would the money come from to pay the mortgage, taxes, car payments, college tuition, and other expenses? Federal Housing Administration statistics show that 46% of all mortgage foreclosures are due to disability.
Income Protection Insurance Covers a percentage of your income and is paid directly to you and you choose how to spend it. It can provide for any monthly repayment such as loan, mortgage, rent, credit cards, school fees, food, gas and electricity and removes the need for separate cover (although you can just cover mortgage or loan repayments if you wish). Cover normally pays out immediately to any cause of death except suicide occurring within the first 12 months. Depending on the payment option you choose, premiums may increase each year.
Income protection insurance is heavily based on occupation for pricing and under which circumstances you can claim. An important consideration for some doctors is to choose an income protection policy that offers cover on the basis of your own occupation. Income Protection Insurance, can remove these risks and provide an income if you are ever too sick, or injured, to work. For a small portion of your current income, you can get the protection you need. Income protection insurance (sometimes called disability insurance) pays you a monthly amount if you are unable to work because of sickness or injury. You can take out an agreed value policy, to receive a set amount, or an indemnity policy that pays you up to 75% of your income over the year or two before you make the claim. Income protection insurance pays you an amount of money, usually monthly, if you are unable to work because of sickness or injury. It can provide security, and should probably be at the top of the list if for some reason you lose your job. This is a form of form insurance that provides relief in the case of financial hardship. It provides an individual with a tax-free fixed amount of money every month.
Premiums are calculated by most companies on age, occupation and lifestyle habits. Premiums can be reduced by taking longer waiting or stand-down periods, or shorter benefit periods. Premiums will increase over the years as the level of cover provided rises. If you would like the luxury of having a replacement income when you are unable to work, then you should consider protecting your income up to a certain amount each month with income protection insurance. This policy can be taken out in case you should fall sick and find yourself unable to work and would also give you the safety of an income if you should have an accident that meant you would not be able to work. Your earning power is the key to your family's financial well-being.
Financial planners recommend income protection insurance, sometimes called disability insurance, as a key element in your overall asset protection program. Your earning power is probably the most important resource your family has and you can protect it simply and inexpensively.
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