Tips to acquiring Income protection insurance

Updated on November 20, 2021

An income protection insurance cover is essential as it helps you to receive tax-free income when you are medically unfit to work till you return to work or retire. Choosing the best service from the various income insurance providers is difficult. With a few tips, the process becomes easy.

Who needs income protection insurance?

Anyone who earns an income through self-employment, formal and informal employment, and those responsible for paying monthly household bills should sign up for income protection insurance. Those with limited income and dependents may also apply for the insurance cover. Understanding the contract terms so that you know when you qualify for claims is vital. Below are a few tips on acquiring the insurance cover.

Tips to acquiring Income protection insurance

1.    Research

There are many income insurance providers. To choose the best, review various top insurance providers, get feedback from existing clients and the estimates before signing up. The choice will depend on personal needs and preferences.

2.    Cover and Wait period

Before you sign for the income protection insurance cover, consider the period within which they will pay you when you can’t work. It may range from 2 years till retirement. The premiums will also vary depending on this period. The insurance contract specifies the wait time before you claim if you stop earning due to medical reasons. It also refers to the period that the insured can survive without the need to file claims. With a long wait period, the insurance premiums are lower.

3.    Health assessment

 Since the insurance policy does not cover all possible health conditions, a health assessment and revealing existing health conditions that may affect your capability to work is vital. Income insurance companies offer options to exclude such conditions, or you may pay higher premiums for them to cover all medical eventualities. Some potential exclusions are drugs and alcohol abuse, criminal activities involvement, or self-harm.

4.    Fully understand the indemnity and agreed on amount policies.

Understanding the two policies will help you make the right choice. Indemnity policy will cover income you earned at least twelve months before the claim or your best income rate. An agreed amount is what the insurance company and the claimant have on the insurance coverage contract. Some people may opt for the combination. With professional help, you can choose the best option depending on personal preferences and circumstances.

5.    Add-ons options

Some income protection insurance companies’ offer covers to save contributions, trauma, and costs your business may incur while you are away. They also cover fees that specialist medical professionals may charge you as part of treatment. Redundancy and dependents cover may also be covered. Depending on your insurance policy contract, some may factor in the consumer price index and automatically increase the benefit amounts accordingly.

An income protection insurance policy is vital and will ensure that the bills are paid and that daily life continues even when you are medically unfit to work. It may cover up to 75% of your income, but the decision differs among individuals. 

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.