Income payment protection insurance should not be confused with a product of a similar name, income protection insurance. Income protection insurance pays out under different terms which usually mean receiving payments up to redundancy age if needed, but it does not protect the policyholder against unemployment.
To take out income payment protection insurance you could choose to search around and compare the cost of a policy with standalone providers. There are several factors taken into account that goes towards setting the premiums for your policy these include the amount chosen to protect, your age and the level of cover chosen. The amount you choose would be limited by the provider so you would need to check this before taking out the policy. This amount is also the sum of money that you get back if you should need to make a claim on the policy and it would be tax free. The payments would begin once you had been unemployed or incapacitated for a period of time. With some providers this is after the 30th day has passed and with other providers it could be up to as much as 90 days of waiting. Some providers will offer to date back the protection to the first day of your unemployment or from being incapacitated so this should be checked in the terms of the policy. Providers might offer to payout for up to 12 months and with other providers this could be 24 months and again this needs checking in the small print.
With a policy to fall back onto you would have a substantial sum of money coming into the home each month that would allow you to be able to keep up with your outgoings. The income could go towards your rent, your utility bills and your grocery bills for example but of course it would be there for you to spend how you wanted on any essential outgoings. You would have this security for the term of the policy which would bring enormous peace of mind.
When taking out income payment protection insurance with a standalone provider you would be able to choose the level of protection you want. A policy could be taken out to insure against unemployment and incapacity together then you would have protection and be able to make a claim if you suffered from either of the events you had chosen to protect against. If your circumstances meant that you only needed to take cover against the chance of becoming unemployed then you could or you could choose just to cover against incapacity alone if this were to suit your needs better.
Related Posts