Income protection refers to a group of insurance products that make sure you can continue to fulfill your financial commitments if you have to take a long break from work.
If you’re unable to work because you’ve fallen sick, had an accident, or lost your job without it being your fault, income protection insurance pays you an agreed share of your salary every month. You may use the money to cover bills, debt repayment, and other expenses.
Income protection is very useful for those who work a high-risk job and want to ensure their mortgage will be covered.
Important note: It only covers events that are out of your control.
Plan for unexpected costs
What Is Income Protection?
Income protection is a short-term insurance policy which people take out in case unexpected circumstances keep them from working for a certain period — for example, illness, injury, or redundancy. Most policies pay out for up to two years, while you rest, recover, and go back to work.
Why it Matters
Your most valuable assets are your health and ability to earn a living. Most people insure their belongings but few think about insuring their income! It’s important to have a plan that protects your financial security in case your regular income is disrupted. That’s where income protection can help.
Your health insurance may only cover a percentage of the cost of your medical procedures, and it can’t pay other bills for you. If you’re out of work and can’t earn a paycheck, you could struggle to pay the mortgage, car payments, and other bills. Going without income, even temporarily, can be hard on a family.
Who Often Takes Out Income Protection?
Income protection is available for everybody, but there are some industries where it’s more common. These include:
- IT services
- Construction and property
On the other hand, a disabling accident or illness may not occur on the job. Studies show that conditions like heart disease and arthritis are more likely to cause disabilities than a work-related injury. The good news is that there are types of income protection that can help protect your family’s future if you become disabled — a reliable solution for long-term income replacement.
Are There Restrictions on How You Use the Money?
No, you can use the money however you want. It’s your cash, your choice.
How it Works
You submit a claim, and you’ll get monthly installments of an agreed total. In a separate transaction, you make your repayments to creditors.
What Else You Should Know
You may be thinking, how does income protection differ from workers compensation? And what about the healthy insurance I already have?
Workers comp doesn’t cover most disabilities, and there may be gaps in your health insurance — so it’s worth talking about income protection solutions with InvoBH.
Your employer may offer disability insurance and supplemental coverage to help with more than your base income. Individual disability policies are also available through a financial rep.
Social Security typically pays people who have been unable to work for a year or more due to their disability.
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Protect Your Income Today
Don’t let unexpected situations hinder your financial plans and your ability to make ends meet. We can help you protect your income with a quality insurance policy, in case of illness or injury. Contact us today to get started.