You might not think of it as such, but our income is generally one of our greatest assets. It’s regular, reliable, and accessible. And, due to our dependence and need to regularly access it, most people usually have only a short period of time during which they can cushion a loss of income. So, what happens past that point?
We all know there’s no way to predict what life will throw at us at any given time and how our income might be affected so it makes sense to protect ourselves as best we can.
This is where Income Protection insurance comes in. Once secured, if you’re unable to work either temporarily or permanently and due to illness or injury, Income Protection Cover will provide you with money to live on, by way of monthly payments while you’re not receiving your salary or wages.
If you’ve ever considered income protection cover, this blog will help you understand what’s involved.
When you are setting up your income protection insurance, you'll be able to choose a waiting period, and a payment period.
What is the waiting period?
The waiting period refers to the amount of time you want to wait between the time you make your claim to and when you start receiving regular payments. The choice is yours, so it is up to you to consider all the factors and choose how long you want your waiting period to be. On average, most people decide on either 4, 8 or 13 weeks.
Generally, the longer you decide to wait to start receiving payments, the lower your premium will be.
What is the payment period?
The payment period is the span of time over which you decide you'd like to be paid by your insurer. This could range from a year, up until your retirement age of 65, or until you're ready and able to return to work.
If you choose a longer payment period, you’ll most certainly enjoy better long-term protection, however, as you'd expect, the increased protection time comes with a higher premium.
You are usually paid up until you can return to work – or until you reach the payment period on your policy. That way you aren’t left stranded while you are still physically unable to work.
What other benefits are usually included with Income Protection Cover?
Policy providers’ aim is usually to try and help you get back on your feet as soon as possible. After all, it’s in their best interest! But the good news is that means that some form of rehabilitation or similar support is often provided as part of the cover.
There is also (generally) some sort of a reset option. This is where your benefit period is reset following a claim once you’ve returned to work. This allows you to claim for a new period of time if the need arises again.
As with most different plans/policies from different providers, there is often the option of add-ons for additional benefits. Add-ons can range from offers to increase the ‘income’ payout, mental health benefits, or redundancy payments.
The list goes on and we understand that working through he details can be daunting. This is where we’re happy to help! Get in touch today and we can help guide you through the process of selecting the best options.