You’ve probably heard a lot about how income insurance can provide immeasurable protection during the most challenging times. This popular insurance policy is designed to replace our regular income during times when we are unable to work due to an injury or illness. Of course, this sounds like a safety net we should be taking advantage of, but does it do what you need it to? If so, how do we ensure we take out the right policy? Today, we want to take a deeper look into income insurance to see if it is worth investing in while exploring other insurance options that might also provide financial support during difficult times.
What Income Insurance Will do and When it Will Pay Out
So, income insurance is usually flexible. This means you can choose the length of time you will receive the benefit, the amount of time you will wait before receiving it, and even choose your own coverage amount of up to 75% of your regular income. Such a generous and flexible policy means that we can always meet our financial obligations. So, providing you have a decent insurance provider or broker, income insurance will do what you want it to when you need to.
Do Other Insurance Policies Offer the Same Protection?
After assessing numerous insurance policies, it is clear that most don’t provide the same level of protection. However, there are similar ones that may be more suitable depending on your financial situation and lifestyle:
Total and Permanent Disability (TPD) Insurance – This policy is similar, but it provides a single lump sum payment if you are permanently unable to work.
Trauma/Critical Illness Insurance – This policy pays a single lump sum payment if a person is diagnosed with a critical illness, such as cancer.
Life Insurance – Some life insurance policies also include lump sum payments in specific circumstances.
What Makes an Income Insurance Policy Stand Out?
While some policies do help us if we are unable to work for several reasons, income protection is different. The best thing about income insurance is that it provides regular payments of up to 75% of your income for a benefit period you choose, which is usually up to two years. While other policies provide a lump sum payment, income insurance releases your benefits in small increments, ensuring you can keep on top of all financial obligations without significantly impacting your premiums. Additionally, receiving a payout with most policies means that an individual is permanently unable to work, whereas income protection is the only policy that covers a person if they are unable to work temporarily. It is also worth noting that income insurance policies are usually flexible, allowing the customer to make all necessary adjustments.
There You Have it
While other policies do provide support if a person is permanently unable to work, income insurance is the only one that substitutes a person’s income while they are temporarily unable to work due to an accident or illness. There are numerous benefits to this fantastic policy, and we can certainly see why it is something everyone should consider if they haven’t already done so.
