Income Protection Insurance – The basics
If you are up to date on the insurance products that have been gaining popularity in the market place recently, you will be aware of income protection insurance. Income protection insurance protects your income in the event that you cannot work for some reason. If you are thinking of taking out income protection insurance however, you will have to think hard about the type of insurance that you want and the be fully aware of the risks that are covered and those that are not.
The two most common risks that you can get cover for are unemployment or disability. If you lose your job, you will require unemployment insurance to maintain your income levels until you manage to find a new job. This is important for people who have a lot of outgoings such as a mortgage and are afraid that they may lose their job and will not be able to keep up with their repayments.
The other common risk is disability cover. This means that if you are injured or suffer some type of accident that means that you are unable to continue working and earning the income that you currently earn, you will be covered and your income will be maintained while you recover. You can usually get insurance to cover one of these two risks, or a joint policy that will cover both risks.
It is important to remember a few points however. The first is that the insurance will only apply for a limited time. You must look at each income protection insurance policy carefully to see how long it will cover you for if you are to suffer a drop in income. Another thing to remember is that you will not be covered if your income loss is due to your own fault, such as quitting your job or being fired for misconduct.