Benefits of Income Protection Insurance

Benefits of Income Protection Insurance


Income protection insurance is a type of insurance policy that pays policy holders an income when they are not capable to work due to illness or injury sustained in accident or somewhere else. It is a type of policy that can help you to still be enjoying your income even though you are not able to work. The income paid by the policy is tax-free.Income protection policy is of two types, the long-term repayment policies and short-term polices. Long-term policies has to do with the period in which your employer stops paying sick pay and when you start receiving your pension while the short- term policy is meant for safeguarding bank loan, mortgages and other types of payment. The duration is from 1 to 2 years.There are different types of income protection benefits and they are enumerated belowThe first benefit of the insurance plan is release of premium. This is a benefit that can either be included as part of the insurance plan or provided at an extra fee. With this benefit, you, as a policy holder will still have to pay your premiums on a monthly basis even though you are unable to work. A release of premium will pay insurance premium for the days you were sick or injured.The second benefit is the rehabilitation benefit. These are different from all other benefits because it involves assisting those policy holders who have been sick to get better, or to retrain and assist them in getting new and better jobs.Monthly income protection plan will not start paying until you have been out of work for about 1 to 2 months period. You may need to choose a better plan that pays out after more than 6 months. Although, there are policy plans that can pay after four weeks of being absent from work, it attracts more monthly premiums than the six month period. Usually, benefits of this insurance is not paid to you when you are still getting sick pay from your employer. Therefore, you will need to check out the duration your employer will be paying you sick benefits. This will enable you to know when to start receiving your all your insurance plan benefits.All you need to do to enjoy income protection insurance is to choose a plan that you can effectively operate and that favourably fits your situation and then you can start enjoying its numerous benefits.

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