Income protection insurance is a technique that ensures your income if you are unable to work under the circumstances of injury or illness and it suits all working people. The exact amount you receive solely depends upon the length of time and your age. Income protection (IP) or critical illness insurance is designed to fulfill the living costs of people rather than paying out after their death.
Usually income protection helps to provide a cover for about 75% of the working person's salary or depending on how much you are going to insure. All you need to assess the requirement of mortgage and other debts, spouse, children or other dependents. One thing is for sure it provide steady stream of takings in case you are not working after illness or injury.
Most people get confused while choosing appropriate policy, all you need is to just spend some time around and you will find a huge deference between insurer's covers and prices. Premiums are not exempted from taxes and will bear the cost of one week's salary for income protection. Generally premium fixture relies on: Age (The more you get older the more premium you may get); Gender; Health and pre-existing conditions; your smoking habit; Occupation (Premium may vary as per type of work for example; a laborer premium differ to an office work person); and Time after which you wish to start receiving payments.
People should know the complexities before opting for income protection insurance. Albeit there are various angles that must be considered while giving the final touch of police. Getting financial advice from reliable financial advisor is very essential. Following are some important factors that need your attention:
- Always consider a policy with index-linked premiums and cover as you know cover will shoot the inflation.
- Insurer should be aware: What is covered and what is not; how much payout would be and cost of insurance premium.
- Mostly companies reassess the health condition of insurer before renewing policy; therefore ask for non-cancelable policy.
- There can be many clauses that put hold you payouts so read every clauses thoroughly.
- In case of group insurance make sure about your beneficiary
- Check the benefit period and waiting period.
Furthermore, read the terms and conditions very carefully because most of the time these are very tedious and hard to understand. It has been proved that insurer faced claim rejections due to implication of various conditions under policy.
No comments:
Post a Comment