Percy Says… If you are employed in an organization or just self employed; then, you should get an income protection policy from xlife. First of all, this will allow you to concentrate on other matters rather than worrying about how your bills would be paid in case something happens. The income protection insurance provides you with a regular monthly income to pay your bills and other expenses.
Before we get in to this, you should know that I am a fully trained accountant (3 years at kaplan will do that for you!) I know a bit about finance, but I’m not an expert. You should always consider getting advice from an IFA if you’re not sure about your protection needs.
Generally, you get 75% of your normal pay. In case you get hurt through an accident, become ill in a way that you cannot work, this insurance will prevent you from going bankrupt. This covers you for a comprehensive period. This period varies for example, two years, five years or while until you reach the age of 65. This means that, in case you suffer from a prolonged illness that keeps you from working, then you can concentrate completely on recovering. The income protection insurance is there to cater for your bills in such periods.
This insurance does not have an age limit, old and young generations are all eligible for this policy. However, the rates vary depending on your age. Older people attract higher premiums than young people. This is due to the fact that, older people are likely to get sick than young generations. The premiums are also determined by your income in that, more income have higher premiums.
Other factors that determine the income protection cost include: occupation, state of your health, previous medical conditions, and smoking habits. All in all, it is an affordable cover which is worth of what you pay. The money you contribute for the premiums, guarantees you the peace of mind in the event of something bad happening.
Whenever something happens to you and you cannot go to work due to illness or injury, income protection plan will give you some substitute of your normal income. To get maximum benefits from this plan and to ease your financial burden, you should combine this plan with your retirement and social security benefits. This is a type of insurance plan that will provide you with a steady and reliable source of income in the event you get disabled.
Expenses and bills including: taxes, college tuition, mortgage and car payment, will still get paid even if you are not going to work. There are several different plans, which you can choose from according to your individual needs. One of these plans allows you to replace up to 65% of your income in case you are not working. Another plan gives you benefits during your working career until you reach the age of 65 years.
It is very important for you to choose a policy which has a wide definition of income and considers sources of income such as overtime and car allowance. Self employed people need to be able to cover the running of their businesses in addition to their salaries. A policy that reflects increment in income in accordance with inflation is even a better choice.
You should also ensure that the plan is guaranteed renewable one, so that you can be in a position to request the insurer to renew the policy without a guarantee on the premium to be charged.