How long could you and your family survive financially if you suddenly became unable to work? Would state benefits be enough to support you? How long would any savings you’ve accumulated last?
If your answer to any of those questions was “I don’t know” then Income Protection (IP) might be something you want to find out more about.
One of the first things you’ll discover when reading about Income Protection is that there are two main types: individual income protection and Employer provided income protection, also known as group income protection (GIP).
Now the main difference between these two types of income protection is who actually pays for the policy. In the case of individual income protection, you take the policy out and pay for it to protect your income in the event that you are unable to work due to an illness or an injury. With group income protection, the policy is taken out and paid for by your employer to protect your income.
Regardless of whether you are covered by individual income protection or group income protection, you will be paid a monthly wage if you find yourself unable to work. It is worth noting that there is usually a deferred period, which is basically a timeframe between you submitting a claim and receiving the first of your payments. A simple rule of thumb is the longer the deferred period, the lower your IP premium.
In addition to receiving a monthly income if you are suddenly unable to work due to an illness or injury, income protection also provides a number of extra support services.
These may include:
Please remember that while your circumstances at the moment might not seem as though they warrant you taking out income protection, life often has a nasty habit of throwing unexpected challenges at us.
If any of your personal circumstances change — for example, you get married or divorced, buy a house, or have children — you should always review your financial situation to see how you would cope if you suddenly found yourself unable to work.
Finally, it is worth noting that self-employed individuals can also take advantage of income protection. This type of insurance provides a safeguard if you find yourself unable to work, leaving one less thing for self-employed people to have to worry about.
If you’re considering taking out income protection, or would simply like to know more about the policies out there that could be right for you, contact Premier Choice today.