What Should I Do Now to Protect Myself in Case of Income Loss? by:Patricia Payne
Many Americans are in a dire financial situation - companies are laying off thousands of employees
, jobless rates continue to climb, and those out of a job are faced with finding the means to support their families. Most pressingly, homeowners must continue to pay on their mortgage and avoid losing their home in foreclosure.If you are currently working, count yourself lucky. Though the present can give us false confidence in our ability to meet financial obligations for the unforeseeable future, anything can happen. Even tomorrow you may be faced with the real possibility of job loss. What can you do now to help protect your income if that happens?
Income Protection Insurance
Income protection insurance has been in existence for a long time. In its most popular form, income replacement is called 'disability' insurance, which helps replace income for those who are injured and unable to work.
There are insurance companies that will sell unemployment income protection policies, however. You can choose a policy that will start replacing a portion of your income, usually about 1/2 or 2/3 of your normal monthly earnings, approximately one month after you become unemployed. Rates can be high for this insurance, but the money you receive while unemployed can save your home and support your family while you find other work.
Mortgage Protection
Many companies offer mortgage protection insurance. This type of insurance will continue to pay your mortgage or a portion of your mortgage should you become disabled and unable to work or become unemployed. Though most mortgage protection insurance policies pay your full mortgage upon your untimely death, there are policies available that will simply take over payments if you become financially unable to do so.
Savings
Of course, you should have an emergency savings account with at least three to six months of living expenses available. If you suddenly lose your job, you will need this savings account to continue paying your mortgage and supporting your family. If you do not have an emergency savings account, set one up today and begin contributing funds into it as soon as possible.
Annuity
Another form of income protection is an annuity. Annuities are a type of investment option, usually through insurance companies, where you pay a lump sum or a monthly amount into the annuity, and at an agreed time, the insurance company begins paying you a regular monthly income. The payments to you are based on the interest returns on your money and how long you wish to receive payments. If you have a lump sum of money that you can afford to put into an annuity, the returns can be greater than leaving the money in a small interest-bearing savings account.
Protecting your income due to unforeseen events should be a high priority for everyone. Start planning today to save or buy insurance or an annuity so that you will have income if you are out of work for any reason.
This article is intended for general information. Always seek sound financial and legal advice before making any financial decision.
About the author
Helpful mortgage information at http://www.online-home-mortgage.net P. Payne works for OHM Mortgage and Foreclosure Information Site providing answers to all those questions people need to know. Starting A Home Based Popcorn Business by:Tony Castle Are You In Business or Enslaved to Self-Employment? by:Dan Boudreau Avoid Foreclosure By Trusting In Yourself by:Nick Adama First Time Home Buyer Tax Credit, Falling Prices, and Government Lending Programs Make it a Good Time to Buy Real Estate by:Elaine VonCannon Work From Home - Uncovering the 5 Supreme Benefits of Working From Home by:Brendan Brosnan Selecting and Starting the Perfect Home Business for You. How to know if a Home Business is a Good Match for You by:Lesley Spencer Pyle Why an Unexpected, Nasty Surprise Might be Facing Florida Homeowners This Spring by:Michael Letcher How Affiliate Marketing Can Enable You To Work From Home How to Succeed in Network Marketing While Protecting Yourself From Scammers by:Daniel Herzner New Home Buying Tips by:Gregory Garner Home Based Business Office: The Challenges And Benefits Of Working At Home by:Lori Olson Money Saving Advice - Sixteen Ways to Save Money on Your Gas and Electricity Bills by:Mark Aucamp Homemade Hang Tags For Small Businesses by:Robert Johnston