Income Protection Insurance: A Boon for the Salaried Class

The main cause of worry for all salaried people is that what would become of their families if something unfortunate were to happen to them. People who are the sole breadwinners of the their families, especially have this tension about an uncertain future and the fate of their loved ones. The Income Protection Insurance or Permanent Health Insurance is aimed at relieving the tensions of people whose main source of livelihood is the fixed income that they bring home at the end of every month.

Every human aspires to protect their loved ones from all types of adversities, basically by providing them financial protection. The fact that lack of money can lead to a lot of difficulties and problems in life neither needs proof nor explanation. Keeping this in mind people take up life insurance, so that in case the person dies, his family will have the much needed financial protection. To fight calamities and accidents, assets like vehicles, home, etc. are also insured.

But, a scenario where a person is unable to work because of sudden illness, or a handicap due to an accident has been largely ignored by insurance companies, and the general public too, till now. Medical insurance and other medical covers are provided by organisations, but they cover only the concerned person's medical bills that too only till a certain time. But, what after that? And what about the ill/disables person's family? It was keeping all these factors in mind that income protection insurance was introduced.

Income protection insurance is basically for those people who cannot resume their normal day to day job, either due to a sudden illness or a disability. This kind of financial protection is provided by the employer to his employees, wherein, the employees are paid a certain percentage of their monthly salary (mostly it is 60%, but it can also be more depending upon the employer's policies). The amount paid is usually not taxed and is mostly paid till the age of 50 to 65.

The income protection insurance policy helps the people dependent on their fixed monthly, maintain a dignified way of living despite being unable to work.

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Income Protection Insurance - Critical Illness Plans

Insurance is a wonderful thing to have and should ease your mind if some crisis happens. All too often when insurance policies are discussed the medical questions can leave people a bit unnerved and queasy. Critical illness plans are a form of insurance that pay out a lump sum once you have been diagnosed with some sort of 'critical' illness that is life-threatening or prevents you from being able to continue your employment that should help you to meet the costs of your financial commitments like mortgage repayments and household bills for a time.

It is imperative that you get the key documents once you have signed up for a critical illness plan. That may seem an obvious thing to say but here follows a cautionary tale.

A woman, on becoming self-employed, in order to meet the requirements of her bank with whom she had her mortgage, was advised to take out a critical illness plan. She duly met with the advisor who spent an hour with her talking about the benefits and assessing how much she would need to pay to cover the cost of her mortgage payments at least if she were unable to work due to critical illness. Medical questions about family history regarding, kidney disease, cancer, heart disease and suchlike were discussed. Having given pertinent information on whether she smoked, her age, general health etc she left with a pack of papers that outlined her financial commitment to the policy and the information she had given the advisor. She was not given the key documents plan but only discovered she was not in possession of this vital document when she made a claim a year later.

The woman had unfortunately developed a brain tumor, a meningioma that had to be excised by opening up her skull and removing the offending tumor. There was no alternative to an operation, as the tumor would continue to grow and be ultimately fatal if not removed. She was delighted that it was diagnosed as benign and there were no secondary growths and relieved the only negative results were a large horseshoe scar on her skull and some compromised mobility function in her left leg - a small price to pay. Having paid out for critical illness and survived the 28 days subsequent to surgery the policy had outlined, she rang to make a claim. They asked her for her key documents policy number. She couldn't find a number on the paperwork given to her by the bank advisor. The company said they would send out the relevant document. On receipt of the document she put things into play and her doctor was contacted to verify the details. No payout! The tumor wasn't 'cancerous, secondary and invasive'. That was a bit of a blow. Somewhat aggrieved she read through the key document. Kidney disease was only due for payout if it was secondary [by that time it is usually fatal!] and heart disease claims only paid out if open-heart surgery was done by a consultant - hard luck if you had a key-hole operation. Had she been in possession of the key document, and as her doctor commented also, there was no good reason for taking out this insurance as its terms were so restrictive...and only paid out if you survived - it was not life cover.

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Income Protection Insurance - Securing the Future Against Uncertainties

Everything in life is uncertain, even life itself. Nobody can predict what may happen the next moment. Insurance is one of the ways to prepare yourself to any unfortunate incident that may occur in the future and protect your near and dear ones from its effects, at least monetarily. Income Protection insurance is one of the ways to fight unpleasant surprises like sudden illness or disability.

People are aware of life insurance and asset insurance, like car insurance, home insurance, etc. but very few are aware of the income protection insurance plan. It is a relatively new concept and not only covers the person affected, but even the organisation that he works for. The main aim of this type of insurance is to generate a steady and regular income for a person who has suddenly taken ill or developed a handicap or disability.

A person who covers himself under the income protection insurance plan, receives a monthly amount in case he is unable to go to his workplace because of sickness or disability. Most of the times people are unaware that such kind of financial protection actually exists. On other occasions, they either do not take it too seriously or do not feel the need for it as they have their other assets and savings to fall back on. But here too, the question of an unpredictable future arises. Not to forget, there is a large section of the population that live on a hand to mouth existence, with no assets and savings to fall back on. This type of insurance is a life saver for them.

The list of people benefiting from such financial protection is not limited to the affected person and his family, even the organisation that he worked for benefits from this insurance plan. This cover provides an advantage to both the parties, i.e, the employee who is not able to work for long periods, and the employer who suffers the loss of an employee. An employer will not have to pay the employee a monthly income from his pocket. By covering the employees under such a plan, employers can provide a sense of security to the employees, hence facilitating retention.

The income protection insurance plan is a must for working professionals who rely on their monthly pay packet to maintain a decent standard of living. It is the duty of the organisation and the financial advisors to spread awareness about this type of insurance cover and help people secure their future.

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Income Protection - A Reliable Way To Protect Your Finance

For working people, situation may be there in life when they get sick and have to stay back at home, and getting their disease treated. Most of the people absent from their work suffer from lacking finance. It doesn't only cause the entire dependant family to suffer, but also they lack money to get their ill health treated. In this way, availing an income protection insurance helps very positively to get all the financial stress over. This insurance lets them enjoy a reliable method of financial protection. Also known as PHI or Permanent Health Insurance, this insurance pays a compensation to the insurer unable to work and go to his/her office.

For people who are unable to go to their office due to some sort of sickness, accident or any other inability, income protection appears to be a boon. Under this insurance policy, the provision is to pay you at least 60% of the salary you are drawing currently. Though in some cases, the amount may escalate up to 75% of your salary. The waiting period for which you will have to wait range between 7 days and 12 months. Usually, the minimum period of getting the benefits paid goes up to 4 weeks. Longer waiting period is useful for those who are able to go to office. But too much waiting period can be of huge disadvantage for those in need of urgent medical as well as financial assistance.

To save oneself from such difficulties, the dire need is to buy the insurance policy only from a company which are reputed for their services. Buying income protection insurance needs a lot of consideration, as even little wrong information could let you fall into severe financial problems. Before you end up signing an agreement, decide how much your income you want to protect. And when you are choosing an insurance company, the best way to select one is to do some online research, and compare the features and price of different insurance policies.

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