The question of whether or not you can survive without income protection depends on your circumstances. If you have savings to fall back on, rich family and friends to tap for cash or access to state benefits then a protection policy may not be of use to you.
However if you don’t have access to an alternative cash supply and you were to lose all or part of your income, then you might find that such a policy is essential.
In this article we will highlight the features and benefits of the short term income protection policy and you can decide whether or not the policy can benefit you.
This protection policy will pay a monthly tax free income for 12 or 24 months subject to the terms and conditions of the provider. Although they are sold alongside mortgages, loans or even credit cards, you still have the option to take out a stand alone policy.
Once the policy is not linked to a specific debt, you can use the proceeds in any way you like. In addition to the financial benefit, the policy provides peace of mind.
If you think of all the emotions you may go through if faced with sudden unemployment, the last thing you need is to have to worry about how you will keep a roof over your loved ones. This is what the policy caters for, the funds can be used for mortgage, loan or credit card payments, even food shopping can be covered.
Policy Benefits and Features
The thing to note about this policy is that the income you receive will not replace your entire salaried income. Because of the maximum benefit levels attached to the policies, the provider will only pay a gross percentage of your salaried income as a benefit.
If you want to apply for a policy you will need to be employed for a minimum period as specified by the provider. You should also take note of the deferment period as this will stipulate how long you’ll need to be out of employment before you can apply for a policy. The typical deferment period is 30 – 90 days.
Policy exclusions is another point to consider. Most income protection policies have them and they usually relate to existing medical conditions. It is worth reading the terms and conditions carefully before you take out the policy. The aim is to make sure the policy covers your particular circumstances.
Choosing your policy could not be easier, if you take out a credit agreement, then your provider can offer you their policy. You can also obtain stand alone policies from independent providers and the premiums are often much lower than that of high street companies.
Conclusion
All in all, if you are concerned about the effect losing all or part of your income could have on your finances it is time to consider income protection. The financial help will be available when you need it and the peace of mind will be priceless.
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