Taking out insurance policies have become part of life. People insure their cars. People insure their houses. And people insure their lives. It can seem like an unnecessary expense until the day that your car is involved in an accident or your house happens to burn down. Or in the event of a persons death. If something like that happens you will be only too glad that you paid your installments regularly. Taking out income protection insurance can prove to be just as much of a lifesaver when tragedy strikes.
Most people rely on their weekly or monthly salary to get by. What income protection insurance does is to protect this income if a worker is in an accident or falls ill and is unable to work for a certain amount of time. In the event of a person being laid off however the cover does not apply.
This type of policy is not to be confused with workmans compensation. It is a personal policy to be taken out by an individual and has nothing to do with the company that you are employed by. In the event that the policy holder becomes incapacitated due to accident or illness a certain percentage of his or her salary will be paid out by the insurance company on a weekly or monthly basis.
Your injuries or illness may be temporary, in which case you will receive a certain percentage of your weekly or monthly salary until such a time that you are able to return to work. If you are not able to return to work at all you will receive the amount until you are at the age of retirement. Paying a small monthly amount towards a policy of this nature can prove to be most beneficial in the event of a tragedy.
This payment will be tax free. It should make it possible for the policy holder to cover most of his or her basic expenses as housing and food. The amount you receive obviously depends on how much you normally earn per week or month and the percentage is usually about 70 percent of your wages.
Just like a car or a house a persons income is an asset. It could be one of the most important insurance policies you ever take out. The policy you choose should be tailor made to fit your needs. It will depend on the kind of work you do. If you are a truck driver and you break your leg you will not be able to drive for six weeks and this should be included in your policy.
Your injury or illness needs to make it impossible for you to perform your duties given your training or level of education. There may also be certain exclusion clauses in the policy in which case no payment will be made. These exclusions most often include drug and alcohol abuse, criminal activity or pregnancy.
If you need to make a claim towards your income insurance policy its important to realize that it can take some time before the payments are actually made. Insurance companies have the right to investigate any and all claims. To make sure that you get your payments in a timely fashion you should submit your claim as soon as possible.