Buying Income Protection
Income protection is a boon for the salaried class that depends heavily on their monthly salary. This method helps them protect their ability to generate a regular income, when financial matters go haywire.
Below are some tips that can assist you in purchasing an income protection policy:
Taking The Major Points Into Consideration:
Here are few of the major points that need to be considered before making any decision:
It is best to sign up with a company that offers a non-cancellable contract. A non-cancellable contract means that if the insurer accepts the policy, it is by automatically renewable irrespective of the kind of claims history you have. On the other hand, a cancellable policy would mean that the insurer has the right to terminate the contract anytime. This could happen due to a claim history or other glitches.
As far as a guaranteed contract goes, the insured sum of money is underwritten there and then, based on sustaining financial evidence. Once recognized by the insurer the decided benefit is what is paid at the claim time. However, with an indemnity contract, the sum paid is based on the person’s earnings during claim time. This can be an issue if someone has started working on a lower pay due to some problem, like an illness.
A waiting period is basically the span of time a person has to be out of work to claim benefits. This can extend from as little as two weeks to as long as two years. Normally the smaller the waiting period, the greater is the premium.
If your need is long term then its best to go for a level premium contract wherein the payment is averaged and consistent. If you need cover for a smaller time you should go for stepped premiums.
Policies pertaining to income protection are structured to cover up income loss due to disease, illness or a mishap, such as an accident. However, contracts that are of good quality suspend your cover if they find you demoted or unemployed and permit you to start again but with restricted underwriting.
We all try to protect our near and dear ones, by offering them financial security. There is no denying the fact that money problems can really create a lot of havoc in life. Bearing this in mind, it’s always wise to insure yourself in every way possible. This will guarantee that your family is taken good care of through income protection, no matter what the situation. This is a great method that assists people who are dependent on a fixed income to maintain a standard of living irrespective of whether they are able to work or not.
