There is insurance out there for cars, homes, health, and even life. However, the type of insurance that seems to be the most overlooked is the one that protects the security of maintaining your vehicles, health, house, and lifestyle habits in case of an unexpected accident. Income protection insurance is important to consider for anyone who works for a living.
What is Income Protection Insurance?
If someone were to fall ill or suffer any type of injury that would prevent them from going back to work for a lengthy period of time, income protection insurance would be ideal to have. It generally covers up to 75% of the monthly income a person brings in. There are different maximum benefit packages that are available, but clearly, the longer the benefit package lasts the longer the insurance will payoff in case of an accident.
Why Choose Income Protection Insurance?
A question that frequently gets asked is, “Why do I need income protection insurance if I already have life insurance?” Honestly, it would be ideal to get both. Life insurance benefits those closest to an individual in case the individual suddenly dies. It can help pay for collected debt and funeral costs so the family and loved ones aren’t left with the burden of paying off the deceased’s expenses.
Income protection insurance benefits someone who has lost the ability to earn a living. It allows for sick/injured people to keep their independence and continue making car, loan, and rent/mortgage payments as well as pay for other necessary expenses. Receiving government benefits can be a long process, and the money coming in from that is usually not enough to keep up with the same lifestyle habits.
Who Should Choose Income Protection Insurance?
Anyone who works and supports themselves with the income they earn should seriously consider income protection insurance. Many people tend to think that those who rock climb, surf, or have other risky hobbies have more reason to prepare for a mishap. However, accidents can happen to any person at any time. No one ever thinks it can happen to them, but every second of the future is uncertain. Having financial security to fall back on would assist in making a difficult situation less stressful.
What Factors Affect the Cost?
As with any type of insurance, different factors about the individual affect how high their premiums are. People with higher risk occupations can expect to pay more than those with jobs that require little manual labor. Health factors play a role, too. Obviously, someone who smokes is going to have a higher premium than a non-smoker. Unlike life insurance, women pay more than men for income protection. Women statistically are at higher risk to develop illnesses even though they generally live longer than men do. Lastly, older people will pay more for income protection insurance than those who are younger.
No one likes to think of their lives taking a turn for the worst. However, it’s better to face that fear and be prepared than to ignore it and regret not taking action sooner. It all goes back to the old saying; better safe than sorry.
Author info:
Arlene Chandler is a freelance writer who focuses on preparing for the unexpected turns life can take. She currently writes for the Australian life insurance provider, http://www.suncorp.com.au/insurance/life-insurance.
