Income Protection Insurance
Income protection insurance is a policy that provides a regular income if you're unable to work due to illness or injury. It helps cover essential expenses, such as mortgage payments, bills, and daily living costs, during periods when you're not earning
How Income Protection Insurance Works
1
Coverage Amount
Typically replaces 50% to 70% of your gross monthly income
2
Payment Duration
Benefits usually continue until you return to work, reach retirement age, pass away, or the policy term ends—whichever comes first.
3
Deferred Period
There's often a waiting period (e.g., 4, 8, or 12 weeks) after you become unable to work before payments begin. Choosing a longer deferred period can lower your premium.
When You Might Need Income Protection Insurance
Limited Sick Pay
If your employer's sick pay is limited or doesn't cover your full income for an extended period
Self-Employed
If you're self-employed and lack access to employer-provided sick pay.
Financial Dependents
If you have dependents who rely on your income and your savings are insufficient to cover your living expenses during a period of illness or injury.
Considerations When Purchasing Critical Illness Insurance
1
Assess Your Needs, Regularly
Evaluate your financial obligations, such as mortgages, debts, and dependents' living expenses, to determine appropriate coverage.
Review Regularly your cover in line with life events such as marriage, having children, or changes in financial circumstances may necessitate adjustments to your coverage.
2
Compare Policies
Obtain quotes from multiple providers to find a policy that offers the best value for your needs. Comparison websites can be helpful in this process.
3
Understand Policy Details
Be aware of the policy's terms, including coverage limits, exclusions, and the claims process
