Should You Have An Income Protection Insurance Policy?

In our working adult lives, our income is an absolute necessity to enable us to survive, and it is therefore of the utmost importance that your income should be protected. An income protection insurance policy can help protect your income when you are unable to work due to sickness or injury. Some may say that this type of insurance is crucial, however studies suggest that the vast majority of working adults do not have it. Understanding the facts about income protection insurance policies is fundamental for understanding how this can benefit you.

As mentioned above, income protection insurance will pay out if you are unable to work as a result of sickness, injury or disability, and there are various types of policies. The more traditional form is a long-term policy, where you get paid until retirement or a return to work, and death. However, as the working world evolves there are more newer short-term policies available.

It needs to be noted that you cannot expect to be paid the full amount of your previous salary, however you can expect to be paid up to two thirds of it, something that should never be underestimated especially in this economic climate. Since jobs come and go, and recessions being forever prevalent in newspaper headlines, nobody is truly safe. Another important factor to understand is that usually an income protection insurance policy does not cover you if you become redundant.

It is important to understand the ins and outs of your working contract before deciding on whether you want an income protection insurance policy. By checking your working contract and employee handbook you will be able to see whether the company you work for already covers you for this type of insurance policy.

Another important factor is understanding just what income protection insurance covers, and this is essential since no two policies are similar since they depend on your own personal medical history. As you may find out, there would be certain illnesses and injuries that you may not be covered for. An example of this is that an insurance provider will most likely look into your family history of illness and disease, and you may not be covered for any sickness that is considered hereditary.

When ultimately deciding whether or not you should have an income protection insurance policy you have to decide whether or not you could survive financially without your regular income and if your company does offer sick pay, would this truly cover all your outgoings?

Depending on your field of work, there could be some professions that are considered more high risk, and therefore more prone to injury or illness. If you do work in a profession, such as mining, construction work, roofing, carpentry, electrical engineering, plumbing etc, you may want to seriously consider the idea of protecting your income, simply because since your risk is higher for work related injury and sickness, you will be more likely to benefit.

Since there is a real chance of work related injury or sickness with high risk professions, being protected when it comes to your monthly salary in the unfortunate event of an injury can really release some of the pressures of being incapable of working. If you do find yourself in a high risk profession, the premiums that you pay may be higher, depending on what group your profession falls in. For real peace of mind, it is recommended that you do have an income protection policy.

When deciding whether an income protection insurance policy is for you, you do really need to understand just how important it is to be financially secure in an event of injury, sickness and disability as a result of your profession. Talking to professional policy operators will help you comprehend what policy best suits your own needs and personal policies need to be discussed further. Nobody enjoys being ill, injured or disabled as a result of your profession, and so by having an income protection insurance policy, this lessens the blow and gives you peace of mind and a feeling of ease knowing that even though you are incapable of working, you will still have some income coming in.