Category Archives: Income Protection Insurance

What Would Happen If The Breadwinner of The Family Stopped Being Able to Earn?

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If your family depends on one income, it can be daunting to think about what would happen if that income no longer existed.

Imagine you are no longer able to work; perhaps you suffered an injury, an illness, or became unemployed. Would your family cope without your monthly financial contributions? We all have serious commitments, from mortgage payments to loan and debt repayments, amongst an array of other essential things to pay for including food, utility bills and transportation.

The breadwinner provides crucial financial stability to dependants, and it is worth considering a plan of action if this safety net was to be pulled from underneath your family.

 

What is income protection insurance?

Income protection insurance is an insurance policy which helps to replace part of your income if you are unable to work because of an illness or injury. You will continue to receive financial aid from your insurance either until the policy ends, you are back to work, you retire, or you die.

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Do I need income protection insurance?

If you don’t have access to sick pay with your employment, having income protection insurance to fall back on could be vital. Also, if you are self-employed, this type of policy could be the perfect cover option to assist in any sick days you need to take.

 

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What are the benefits of income protection insurance?

Income protection insurance could be a lifeline for you and your family if you are suddenly unable to work. A big benefit of this type of policy is that it will give you and your dependants pay outs until you are able to start work again, or until the policy ends. This gives you more time to recover and less stress in the process. Income protection policies also cover most illnesses that would deem you unfit for work. This means you don’t have to worry about specific sicknesses not being covered. Also, you can expect your insurance pay outs to be tax-free so you can receive the most money possible. Finally, with an income protection policy, you can claim numerous times within your policy’s time frame. If you happen to be too sick to work twice in a year, you can still be covered both times, as long as your policy is still valid.

 

How much does income protection insurance cost?

The cost of income protection insurance depends on your personal situation, and there are key factors which will determine how much you pay. These include your age, if you are (or were) a smoker, how much cover you would need, your health and the types of illnesses and injuries covered in your policy. If your job is considered more high risk or dangerous, such as working in construction or with a lot of manual work and heavy lifting, your policy will likely be more expensive than someone’s who works in an office or a shop. Also, if you have any pre-existing medical conditions, you could end up paying more per month than someone with a healthy background.

 

How can I get income protection insurance?

The best way to find the right income protection policy for your needs and situation is to use a comparison website. This will show you all of your options in a clear format, detailing all of the policies available, their individual benefits and costs. You can then compare all your options and take time picking the perfect insurance policy for you.

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What other ways can I keep my family protected?

Income protection insurance is key to ensuring your pay cheque can always reach your loved ones, even if you are no longer able to work. However, there are other ways you can  help to protect your family, and ways you can provide them with financial cover in tight situations.

 

Sick days

If you are unable to work due to an injury or illness, your employer may be able to provide you with financial assistance while you recover. Check in your contract to see if you have access to sick pay. If you do, see how much money you would receive for each day of absence, and for how long you would be able to claim sick days. If you are not entitled to paid days of absence due to illness, this could be something to discuss with your manager to see if it could be a possible contract negotiation.

 

Life insurance

Life insurance provides your dependants with financial assistance if you die. It could be worth investing in, especially if you have a number of dependants who rely wholly on your pay cheque. Your life insurance policy could ensure that your loved ones receive cover for mortgage payments and general living costs in your absence. The peace of mind, knowing you are protecting your family no matter what, could be exactly what you need.

 

Savings plan

If you are unable to work for a significant amount of time or become suddenly unemployed, it would be ideal to have money to fall back on. Having a savings account with a high interest rate could come in handy in certain situations where your regular pay cheque no longer exists. Put a set amount of money into this account each month and work it around your budget. Try your best not to touch your savings unless it’s an emergency. If you are unexpectedly unemployed or seriously injured, you could feel secure in the knowledge that you have enough money saved up to cover mortgage or rent payments for a few months until you’re back on your feet.

 

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8 Reasons Why Income Protection Insurance Could Benefit You

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Income Protection Insurance (IPI) could be the safety net you need to protect your family and your finances. With this insurance you can receive payouts if you are unable to work, allowing you to focus on the important things, rather than worry about money.

There are three IPI options to choose from which all cover different things.

First, you can choose to cover accidents and illnesses. This will only cover you for any injuries or ailments that restrict you from working and earning. There’s also cover for unemployment. So if you lose your job and have some time between jobs where you’re not bringing in any pay cheques, this cover can help you stay financially stable until you’re back in employment. Finally, you can cover illnesses, accidents and unemployment. This covers all bases and can protect you and your family from any financial stress, whether you have lost your job through redundancy or cannot work due to an illness.

Here are 8 ways IPI could make your life a lot easier.

 

 

You can look after your family and pay all your bills no matter what the circumstances

IPI is really all about security. It allows you to focus on the important things like your job, your health and your loved ones, rather than stress about money. With IPI you have a smart, stable plan for any unexpected circumstances that may come your way.

 

You can pick your time frame

There are two types of IPI to consider: long term and short term. Short term IPI will cover you for a fixed period, usually giving pay outs for between six and twelve months. Long term IPI policies are more suited to people who are unlikely to work again, especially if they are seriously ill.

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It can take some of the stress away from sickness and hospitalisation

Whether you’re battling an illness or recovering from a painful injury, becoming hospitalised or bound to your bed for long periods of time is not what anyone wants. When you are admitted to hospital, you should be focusing on your recovery. But all too often people end up worrying about looking after their families or fretting about getting behind on payments. IPI could take a lot of that stress away by paying out a monthly sum to you and your dependants, ensuring that bills and debt payments are covered and you can concentrate on getting better.

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Your payouts will be tax-free

You won’t have to worry about losing some of your premium with hidden charges or taxes. Your insurance pay out will likely be income tax-free so you can get as much money as possible.

 

Your policy could keep you covered until you’re back in the job you love

There are three occupation classes to choose from on your policy, and these determine how much you will be expected to pay and receive. ‘Own occupation’ covers you if you are unable to work in your specific job. This could be the most expensive cover, but also very beneficial if you love your job. ‘Suited occupation’ cover will allow you to receive pay outs until you find a job suited to your skills and previous work experience. ‘Any occupation’ is often the cheapest cover, and it will pay out until you find any job.

 

The pressure from your job could be weakened

If you have a very stressful or dangerous job, or one that is unstable and could leave you unemployed in the not so distant future, IPI could be a handy safety net. IPI allows you to have a back up plan in case you lose your job. This means you can focus on your current job or finding a great new job without the extra financial worry.

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You can get IPI even if you’re self-employed

IPI policies are for everyone, no matter your location, your age, or what line of work you are in. You can be employed in a large company, a small independent business or you can be self-employed and you can qualify for IPI.

 

Some policies offer more than just a payout

While a monthly sum to keep you financially stable is a huge help, some policies can give you extra benefits on top. When comparing various policies, keep an eye out for cover that will offer a single pay out when you die, as this could be an extra boost to any life insurance policy you currently have. Some policies will also offer support for people going through rehabilitation which is another great load off your mind.

 

You can find a premium that fits your budget

How much you pay towards your insurance all depends on your personal circumstances and you can use comparison websites to find a policy that suits you. They will take into account your age, medical history and occupation to find you something that fits nicely within your budget and has the right kind of cover for your personal needs.

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