Home Finance Explore The Full Benefits Of Income Protection

Explore The Full Benefits Of Income Protection


If you are reading this then you must be considering taking out income protection insurance, and you would like to know the benefits you stand to enjoy by taking out this policy. However, if you have no idea of what income protection insurance is, here’s a little introduction to get you on track.

Income protection insurance policies provide workers with income to cater for their expenses for the period they are incapacitated and unable to work due to an illness or injury. In simpler terms, income protection insurance gives you money to cater for your expenses for the period you are incapacitated. 

This means that for the period you are ill, you can afford to cater for the cost of your medical care as well as other costs that would arise along the way.

Benefits You Get With Income Protection Insurance

Income protection insurance policies are exciting especially when you talk about the benefits attached to taking out a policy. These benefits make income protection insurance a perfect match for workers. Here are seven benefits you would enjoy by taking out an income protection insurance policy:

It helps you get your life get back to normal faster:

The long term effects of being out of a job often turns out to be negative for most people. This may often lead to resulting to sell off properties, taking out loans or even declaring bankruptcy. In fact, it may take longer for them to get back on their feet.

Taking out an income protection insurance policy would provide you with the income coverage you need to cater for your expenses for the duration of your illness. This way, there is no need for you to begin sourcing for alternative funding.

It ensures that your income continues even when you are unable to work:

Generally as humans we avoid imagining worst case scenarios as such, we avoid dwelling on thoughts of us being sick or injured. However, sicknesses and injuries are unpredictable as they could come at unexpected times, sometimes with no symptoms. This unforeseen circumstance can turn your financial situation upside down in little time. 

With income protection insurance, you could continue to receive up to 80% of your regular income even while you are away from work. This way you are guaranteed income that can cater for your expenses while you are out of a job.

Income protection insurance policies can be customized:

Your income protection insurance policy can be customized to match your individual circumstance. You can choose to reduce your waiting period to start paying immediately after your purchase the policy, this would however mean that your insurance premium will be more expensive. You could also choose a policy that will pay a benefit for one, two or five years. You could also choose one that would pay you monthly benefits until you can go back to work.

Your income protection insurance policy can be tailored to match your needs in terms of policy coverage and how much premium payment you can afford. 

Income protection insurance claims are easy to make:

One exciting benefit of income protection insurance is that claims are straightforward and easy to make. This means that you do not have to go through stress when applying to receive your benefits when you fall sick or become injured. Insurance providers try to make the claim process as soon as possible.

Once you are unable to work due to an illness or injury contact your insurer to inform them of the situation. All you need to do after this is to sort out the paperwork; a claim form, a doctor’s report, a privacy statement and information supporting your income claim.

Restoration and rehabilitation benefits:

While ill or injured, you would also have medical bills which would also need to be covered. This would be really hard to do, because you are out of a job and you would not be earning income. Also for quick recovery and rehabilitation, you might also need to undergo corrective surgery or enter into long-term care, which you might be unable to afford.

Income protection insurance provides you with funds you need to settle all medical bills, allowing you focus on recovering. This way your health would thrive while you receive the best care you require.

Income protection insurance covers all illnesses and injuries:

Unlike income protection insurance unlike insurance policies provided by companies provides coverage for a large majority of illnesses and injuries which would keep you away from work. This coverage is not limited to injuries and illnesses sustained at work like company insurance policies. 

Instead, these policies cover all sicknesses you may sustain during the course of your daily activities whether or not they are work related.  You can claim your benefits as long as you are ill, injured and away from work.

Income protection insurance premium may be tax deductible:

Premiums payments for insurance on things such as your house are generally not tax deductible. Other personal insurance policies such as life cover, trauma insurance and so on are in the same way not tax deductible. 

Premiums paid for income protection insurance policies paid by you (those not gotten through superannuation) may also be tax deductible depending on the benefits you need coverage for. 

How To Get Income Protection Insurance 

Now that you know the benefits of taking out an income protection insurance policy, we can be sure that you would like to know how to get one. 

To get income protection insurance you need to:

  • Fully understand the details of income insurance protection insurance
  • Research on what insurance company you would prefer to buy a policy from.
  • Apply for an insurance policy
  • Take your time to go through the policy details, its terms and conditions to understand what is covered and what is not. 
  • Consult a financial advisor to understand the policy
  • Sign and submit your application form 
  • Keep a copy of your application form

Income protection insurance policy is advisable for all workers, especially those who do not receive sick pay from their employers or those who are self-employed. This policy replaces up to 75% of the income you receive. Making claims on income protection insurance is also as easy as taking out the policy.