Income is something that’s very significant in one’s life. It helps put food on the table, pays for any expenses, and allows you to function productively. However, that cash flow is always subject to stopping due to certain personal conditions.
There are many insurance programs out there that help provide you with the right financial protection against the odds. It can be rather hard to tell if you need income protection insurance specifically instead of business insurance or property insurance. Read up on some of the common questions that may help you come to terms with getting income protection.
When Is Income Protection Important?
Income protection insurance is somewhat similar to other types of coverage as it provides financial aid to replace your income when you’re unable to work because of a disability, disease, or accident. This can be very important in case of any unforeseen circumstances that may prevent you from doing your usual work.
The income protection insurance policies differ from other kinds of insurance as it covers individuals who may be left to their own when unable to make an earning. Here are some of the few examples of when income protection becomes important:
- You are self-employed and in need of a leave
- You are a small business manager and in need of a leave
- You are a person with a temporary disability
- You are a person with a permanent disability
Income protection insurance can come in handy when your dependents are reliant on the income that you have, and you have no other source for the wages that can cover your monthly expenses. That financial protection can also be used in conjunction with private health insurance. That way, you can pay for any outstanding medical bills.
How Do You Choose Income Protection?
When you’re choosing an income protection insurance program, be sure to have a financial adviser involved. They should be able to check how much you need and where to get the optimal plan from. They can also assess the different income protection policies included in a program.
Two kinds of income protection policies that you may commonly see in your insurance are indemnity value policy and agree value policy. The former guarantees a smaller monthly insurance payment and is great for those with stable income; the latter is a higher monthly insurance payment that suits people whose income changes annually.
How Do Payments for Income Protection Go?
Income protection insurance often comes with a waiting period. It could take from two weeks to up to two years before payments for income protection roll in. However, a long waiting period often means that the payments are much cheaper. And it still pays up a considerable percentage of your pre-tax income afterward.
Reclaiming the benefits of paying for your income protection insurance is dependent on how long you sustain your monthly payments and the policies laid out for you in a program. Longer benefit periods can be quite expensive to keep up, but they always guarantee better financial protection if you ever lose your income.
Conclusion
To sum it up, income protection insurance can be quite beneficial for a number of circumstances. If you’re able to, choose and pay for the income protection that will best fit your situation. Having a professional weigh in will help you get the best policies on your side.
Interested in getting income protection? New Wave Advice is a financial advisory firm based on the Gold Coast that tailors advice for each and every client in Australia. Get in touch with us today!
