One word that has the power to make you feel either safe or insecure.
Income is one of the greatest resources when it comes to your assets. Without some sort of income, you have limited possibilities.
In other words, you are dependent on your income. Whether for your daily survival, wealth accumulation or creating a comfortable lifestyle for your family.
This is something we can all agree with, right?
But what happens when, due to unexpected sickness or injury, you become unable to earn any income?
Income protection comes to your rescue.
If you have one.
Let’s take a look at the benefits of having an income protection…
What is an income protection?
Income protection is a type of insurance policy that helps people who, due to some injury or illness, are unable to work for a certain period of time.
Before we go any further, you should know that insurance policies vary depending on the insurance company. This is why it’s important to carefully read all the documents of your policy before signing anything.
Now, let’s take a look at a few things you should closely consider before deciding your income protection policy:
- Sum insured amount
- Benefit and waiting period
- Agreed versus indemnity
- Ownership structure (super, non-super or super-linked)
- Stepped versus level premiums
- Pre-existing conditions, exclusions, and loadings
Another important things you need to decide when it comes to your income protection, are the specific provisions, categorised into:
- Core provisions: fundamentals or primary considerations of your income protection policy.
For example, an income protection insurance policy that will replace your income if you were unable to work for a period of time due to a sickness or injury.
- Supplementary provisions: additional or secondary considerations for determining your need for income protection.
For example, an income protection policy that also pays a specified injury benefit in case you were to suffer a certain injury (fractures and loss of limbs/use of limbs).
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How to choose your income protection?
Usually, each individual will choose the income protection policy that passes their own cost versus benefits evaluation. For others, the decision might be based on their personal preference.
People either choose an income insurance focused more on core provisions or on supplementary provisions.
There’s also a third option that incorporates both provisions. But it often comes with higher insurance premiums. Is it worth the extra cost?
I will try to answer that question by giving you a few examples of supplementary provisions that offer a few specific benefits. Let’s take a look…
- Bed Confinement Benefit is paid when the insurer has been confined to a bed due to sickness or injury for an at least three days or more. They should be under the care of a registered nurse.
- Child Care Benefit reimburses the cost of child care fees while the insurer is disabled (due to sickness or injury) and require additional child care assistance as a result of disablement.
- Specified Injury Benefit is paid when the insurer suffers one of a list of injuries (e.g. fractures and loss of limbs/use of limbs) even if they are still working and earning their usual income. The Specified Injury Benefit is payable from the date of the injury – no waiting period.
- Accommodation Benefit provides financial assistance in the accommodation costs of an immediate family member who has to travel from their usual place of residence to be with the insurer in the event of bed confinement (due to sickness or injury).
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When it comes to choosing the right income protection policy for you, make sure you are informed. The supplementary provisions may not be identical with those I’ve mentioned above, depending on your insurance company.
Income protection can help you secure your income and assets in case of an unfortunate event. Choose to protect you and your family by protecting your income.
I can assist you with any questions or concerns you may have regarding your insurance and income protection. Let’s get in touch now.