You have many decisions to make when considering income protection insurance. One of the first is the sum of your income you wish to protect as this is the tax free sum you get back if you should need to claim on your policy. You could take out your protection for unemployment and incapacity together and claim if you suffered from either of these events.
You do need to be unemployed or unable to work for a set amount of time before the policy would payout. With some providers this is once day 30 has passed. With other providers you might have to wait 60 days and it might be as long as the 90th day before a claim could be made with other providers. Just as the terms as to when you can claim differ then so does how long benefits would continue to payout. The provider could offer you 12 monthly payments of tax free income while with others it might be up to the 24th month. However if your policy paid out over the longer term you will pay more in premiums of course as you would have twice as long if needed to find work.
When considering income payment protection insurance that pays out under the terms outlined above you do need to ensure that you are looking at income payment protection. Income protection is a similar policy but it would only pay out for incapacity and it would pay up to your retirement age if needed. However both forms of cover are often called by the same name which causes confusion.
You can protect your income against redundancy and incapacity in one policy. However if needed, you could just choose to cover the possibility of being unable to work or you might just choose to protect against unemployment alone should it suit your needs more. You should also check the policy to find out if the provider has included carer cover in your policy. If they have you could claim on your policy should you have to cease working full time in order to stay at home to take care of a loved one who was incapacitated. Not all providers are generous enough to provide you with this security so you do need to check in the small print to find out.
With a policy behind you there would be an income coming into your home that you could use as you wanted. You might choose to use a portion of it to maintain your rent each month. You could also use some of it towards being able to maintain your gas and electric bills each month. Without an income protection insurance policy you might have to risk claiming an income from the State. A State income could let you down as you might find that it does not supply anywhere near the amount you brought home when working.
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