An Unemployed Individual Can Benefit From Income Protection Insurance
To be unemployed is tough nowadays. There will be no monthly salaries to pay for the bills or for any necessities at home. Income protection insurance will be of help by paying a policyholder a fixed amount of money either weekly or monthly if they are unable to work due to illnesses or accidents. This is also known as salary continuance coverage. This can pay up to 75% of the annual wage of the policyholder. The payout usually happens 30 days after the insured person is unable to go to work. This will go on until they resume their work or until the age limit of 65.
This kind of bond will provide financial security that will be helpful in the event of unforeseen circumstances like unemployment because of illness or injuries. The monthly or weekly benefit payments are free of income tax. The company that provides the insurance does not have the right to cancel or refuse renewal of policy if the insured person still pays the premiums. It may offer a waiver of premium option where in the policy premiums are not needed if the client is paying the benefits and the policy cover is normal as it is. IPI also provides no cost benefits like for death, cosmetic surgery or other surgeries and transplants.
An individual can receive an amount between 50% and 75% of their gross salary through salary protection salary. This can be purchased to cover specific cost such as loans and other basic expenses. It can be available for a fixed term of 12 and 24 months or can go higher as 5 to 10 years. The payments that are counted as income are considered to know the amount of insurance that is needed.
Variety of factors can affect the cost of a coverage plan and can vary from insurer to insurer. There is the length of coverage, the replacement income cost, the waiting period before payment starts, and other added options that are bought. The clients age, sex, occupation, health history, and the retirement age can be some of the factors that may affect the cost.
There are deductions for other types of payments that are paid out on an IPI. These may include supplemental sick pay or salaries paid by the employer and the earnings from self employment and pension payments.
You must understand what your insurance covers. Have a talk with your financial planners regarding your coverage for they will know how much you are covered. Like any other insurance policy, IPI also has limitations and exclusions that are not covered. An example of this is getting pregnant and having a baby and also being inflicted with injury during a war.