Income protection insurance protects your finances against the possibility of you losing your own to unemployment or incapacity. If you were to become a victim to either of these events you would still have to find the money from somewhere to maintain your outgoings. With protection behind you there would be still be an income coming into the home once you had been a victim for a certain amount of time.

The amount of time you would have to have suffered from either incapacity or unemployment would be dependent on the provider. You could claim once the 30th day had passed with some providers. You might be eligible to claim on your policy once 60 days have passed and with others it could be up to the 90th day. Some providers could also date back your income to the first day that you suffered one of the events but this would need to be checked with the provider. You might be able to continue claiming on your income for up to 12 months with some providers and with others you could have to wait for as long as the 24th month before you could make your claim. The amount you would get back from your income payment protection insurance cover is your chosen amount and this amount would be pre-agreed with the provider you chose to take your policy with as all will set a limit. This income is then paid back over the term of the policy as your tax free income.

When considering income protection insurance there are two types of cover, income payment protection pays out under the terms outlined above and the other which pays up to your retirement age if necessary but would not pay out for redundancy. As both are often simply termed income protection it can be confusing so therefore you would want to check that you were taking out the right type of insurance for your needs.

You might choose to take out your policy to protect against redundancy and incapacity together if you wanted the security of being able to claim against either event. You could alternatively choose just to protect against the possibility of incapacity alone. If it suited your needs better then you could take a policy that would pay out in the event of you becoming redundant. The chosen events would go towards how much you would have to pay for the monthly premiums for cover.

Your income protection insurance benefit would bring enormous security while you looked for work or concentrated on making your recovery. You would have the income to keep up with your rent, your utility bills and would have the money to be able to keep food on the table for the family. Of course these are just some of the outgoings that you would have the money to meet.

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