Income protection insurance cover is your safety net against losing your income. You might suffer from a loss of income if you were to become a victim of redundancy or you could suffer incapacity. Either of these situations could make your life a great deal harder than it could be if you had given some thought to taking out a policy. Cover does not have to work out expensive if you choose to take it with an independent provider and compare the cost. You can also compare what you are paying out for and ensure cover is suitable.
One of the factors taken into consideration when deciding how much the premiums would be is the amount of your monthly income that you choose to protect. This amount is the tax free sum you get back from your policy should the need arise to make a claim so it would need to be agreed by the provider. You would have to wait for a period of time before being eligible to make a claim on the insurance and this would be provider dependent and be in the region of 30 to 90 days. Some providers might offer income protection insurance cover that would continue for 12 months and other providers might extend payments to 24 months therefore you would have to find this out before taking on your policy. Cover that pays out for 24 months would of course work out more expensive than protection paying 12 monthly payments in income. A period of 12 months could also be more than adequate for you to have made a full recovery and be able to get back to work or would provide time for you to have found work.
With income cover behind you there would be less chance of you failing to maintain your essential outgoings. These of course would be dependent on your circumstances but would usually include rent or mortgage repayments. While income cover isn’t specifically for your mortgage repayments as there is mortgage payment cover to consider, it could allow you money towards keeping your repayments up to date. If you are renting then landlords will expect their rent on a monthly basis and if you were to fall into arrears you could be evicted. All households would also have utility bills to meet and falling into debt with these could see you losing your services.
Of course income protection insurance cover would cover any essential outgoings and commitments. You would be able to spread out the income as you wanted between any outgoings. Without this income you could have to make drastic lifestyle changes and even then you could still fail to be able to meet all your outgoings. With cover you would have the time needed to concentrate on looking for work or making a recovery without the added anxiety of where you would get the money needed for those all important outgoings.
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