What Is Income Protection Insurance?
If something were to happen to you that prevented you from working – whether it was due to illness or an accident – income protection insurance would mean you would receive regular payments instead of losing your income through not being able to work. This kind of insurance, which was also known as permanent health insurance is available in Ireland and the United Kingdom.
As far as this insurance is concerned, the following is how “inability to perform work duties” is characterized:
If the policy holder is self employed, and is unable to perform any of the work required and is also unable to do any other job because of incapacitation due to an accident or illness, this will be considered as “inability to perform work duties”.
If the policy holder is trained or educated in a particular field, or to perform specific duties and is unable to carry these out because an accident or illness has rendered them physically incapable, this would fit in with the policy terms and the policy holder would be entitled to a payout.
Being unable to perform any kind of work that requires certain duties due to an accident or illness, as well as being unable to perform any normal day to day activity (for example, washing, eating, shopping, cooking, dressing etc.) due to incapacitation caused by an accident or illness would also be considered to meet the terms of the policy.
It is important to check to make sure that the policy actually states the various functions as well as the definitions of each function regarding these cases. Taking the time to go through all definitions as well as what is included in the policy and what is exempt will give you peace of mind that you have the full cover you need.
Income protection insurance usually comes with a limit for payments (generally around 70% of gross earnings of the person), and this is something to consider when looking at the terms of the policy. Although 70% is common, it could be less for those who have very high income.
If the policy holder is entitled to other state benefits, or payouts from other insurance policies, the maximum limit of the income protection insurance payout could be reduced accordingly, and it is vital to check if this is the case for you.
The cost of the policy can be significantly affected by the time gap between the moment when the claim is made and the time at which the payments begin. This is known as the deferred period.
Advantages Of Income Protection Insurance
Income Protection Insurance offers far more benefits than those offered by other personal insurances, and includes cover for various challenges and incidents such as illness and accidents.
Following a claim, the payments from an Income Protection Insurance policy continue until the policy holder recovers, retires or dies. If the policy term ceases to exist before that event, it will end then.
Payments from this insurance policy are tax free and are usually paid on a weekly or monthly basis.…Read More