Income Protection insurance provides a monthly payment of up to 75 percent of your pre-tax income (less expenses), if unable to work because of illness or injury. Payments are calculated on a proportional basis and related to the loss of income.
Most people may be able to cope financially if they have to take the odd day off work for minor ailments.
What happens if a more severe sickness or injury prevented you from going back to work for weeks, a couple of months or even years? How would this affect you paying for living expenses or meeting mortgage payments?
The ability to earn an income is the most valuable asset and income protection provides the peace of mind to continue your lifestyle when the unexpected happens.
Insurers provide two main types of income replacement products:
Indemnity Income Protection payout is based on the actual earnings of the insured person, at claim time. Whereas, an Agreed Value Income Protection payment amount is agreed at the time the policy is issued.
Income protection policies are generally only available to people in the paid workforce, either employed, self-employed or businesses owner, although some insurers do offer cover for house-wives / husbands.
Premiums vary according to gender, age, waiting periods and occupation.
ADDITIONAL OPTIONS OFTEN AVAILABLE INCLUDE:
- Totally disabled benefit
- Partially disabled benefit
- Recurrent disability benefit
- Premium & cover suspension
- Waiver of premium benefit
- Retraining & Rehabilitation
- Booster options
- Inflation protection