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An Introduction to Income Protection Insurance

No life is safe from unexpected events like accidents, sickness, and natural disasters. Sometimes such incidents make a person incapacitated and they are unable to go to work and carry out their usual activities. Nobody wants to be in such a situation but the possibility is always there. What happens when such an event does take place?

Income Protection Insurance or IPI is a type of plan that allows you to support your family even if you’re unable to get up or leave your home to earn. According to this policy, the holder is eligible to receive certain benefits for a period of time. There are terms and conditions, however that keep on changing. You need to review these terms thoroughly to see if this plan is for you. Income protection is basically meant for all those people who are unable to work; they might be permanently disabled or bedridden due to sickness or old age.

This plan safeguards a person from all unexpected events that may take place during the time he or she recovers from illness. It is a monthly benefit scheme that pays off up to 75% of your gross income. It is also stated in the plan that even if a person is unable to return to work till he or she reaches the age of 60 or 65 (retirement age), the policy will continue to pay the bills and handle all other expenses on their behalf. These benefits are completely free of tax and are paid on a regular basis.

Almost all types of mishaps and disasters are covered in this scheme except those that happen due to negligence on part of the policyholder. These include drug abuse, self-harm events like attempt to commit a suicide, common complications that occur in pregnancy, and use of alcohol beyond safe limits. All these events do not come under unexpected or natural calamities because the person is aware of the consequences of such acts beforehand. These are therefore not covered in the IPI.

There is also an option for employers to offer group income protection policy to their employees. However, if a person decides to change the job, his or her coverage gets canceled automatically. The guarantee offered by such an insurance plan is secure and long-term and therefore these policies are usually very costly. However, a large number of people are considering this type of life insurance policy in USA and UK because of its unlimited benefits and protection.       

Life has to go on even if the main financer of a household becomes sick or suffers a serious injury that prevents him or her from going to work. There are bills to pay, school fees and other charges to handle, and groceries and household items to buy almost on a daily or weekly basis. If there is no source of monthly income due to a calamity, there is a way to receive benefits through an insurance policy known as Income Protection Insurance or IPI. Read its terms and conditions carefully to find out if you’re eligible and how to apply. 

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