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Income Protection Insurance – What Is It ?

Chances are that you are reading this article because you want to buy an income protection insurance policy but do not know what is it. This article will provide in depth information about what income protection cover is and how it can help you. It is a type of cover that allows the policy holder to get a fixed amount of money every month if he is unable to work due to sickness or injury.


Policies & Benefits

A few selected policies also allow the policy holder to get a fixed monthly income when he is unemployed for a short period of time, however there are various terms and conditions to such policies.

The cut off age for these policies is usually 65 years, however some insurance companies allow people up to the age of 70 years to get benefits from such policies and in such cases, the policy holder will have to pay an additional premium.

Most policies cover 75% of the gross annual income of the person buying the policy and some policies cover an additional 9% if the policy holder has additional benefits such as retirement benefits. These policies are almost always tax deductible which means that the person buying the policy has to declare all components of his income while applying for income protection.

Other than getting a fixed amount every month, policy holders can also enjoy additional benefits that are usually offered for no cost. These benefits include but are not limited to death benefit, cosmetic or certain other surgery benefits and transplant benefits.



While understanding “what is income protection insurance,” it is important to note that policy holders can also apply for claims however the amount they receive will depend on if they have opted for an indemnity contract or a value agreement.

Buyers also have the option to choose between levelled premiums and stepped premiums, the type of premium chosen will have a direct affect on the amount the policy holder has to pay to own the insurance contract.

It is also important to remember that before getting the first monthly installment, the policy holder has to wait for a certain number of days or months and this is known as the waiting period. This waiting period directly affects the amount of premium paid and a shorter waiting period means a higher premium. While choosing a waiting period, people should remember that they should choose the number of says they want to wait depending on the number of paid leaves that they have.


Types of income protection



Income Protection Insurance
Life Insurance