subject: Income Protection Insurance: No More Living Without Salary [print this page] Most people intend to work honestly and safely. Being out of work due to ill health is at times farthest from the mind of a person starting a business or beginning a career as a professional. Although people recognize that becoming too sick or even disabled to work is a distinct possibility, there is the unconscious belief that it is something that happens to somebody else. Thus preparing proper income protection insurance is either delayed or at worst foregone.
However, there may well come a time in a person's life where one has to live without a salary or other form of stable income. During these times it is important to have income protection set up in order to sustain one's way of life until another source of reliable funds can be established be it in the form of a new job, a new career, or new business. The earlier such protection is established, the easier it is on the pocket because of the factors the premium for such insurance is dependent on. These factors either increase or decrease the risk to the insuring company.
One of the factors that affect insurance premiums is a person's age. It is a fact that a person becomes more susceptible to disease the older one gets. So, as a person ages, insurance premiums become accordingly higher. Further, there is an increased risk of disease stemming from today's modern lifestyle or from the hazards one is exposed to in the work environment, such as stroke, heart disease, liver disease, arthritis and diabetes.
Another important factor is when and how long a person plans to avail of the benefits of income protection. Those who have the means to support themselves for a couple of years before claiming insurance benefits will have a lower premium than those who will need it two weeks after being out of work. A longer period before the start of the benefit also gives the insuring company time to prepare resources. The length of the benefit period will also affect the premium. This translates to the amount of money the insured will be receiving. In most cases this amount is equivalent to three-quarters of one's prior salary or income.
As a person ages, more and more reasons appear that make acquiring insurance against the loss of livelihood a must. These reasons raise the premium one pays for such insurance. It is thus very important to have such protection in place while paying for it is less expensive.
by: Brent Ford
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