Like life insurance, income protection insurance is an
insurance policy that the policy holder hopes will never have to be
settled. However, the peace of mind that
accompanies these policies may justify the cost associated with them.
Income protection insurance is widely available through many
different insurance providers. It is
important for those seeking insurance policies, like income protection
insurance and life insurance, to consult a financial professional so that there
is an adequate understanding of the limitations and conditions associated with
such plans.
An income protection
insurance policy holder must be aware that in order to receive a settlement,
certain conditions must be met to determine pay out. Most income protection insurance policies will
initiate benefit distribution only after it can be determined and verified that
the policy holder has become injured or incapacitated as a result of an
accident or illness.
It is important to
understand, however, that income protection insurance will not distribute
benefits for a loss of employment for reasons not related to an injury or
illness. Once the required conditions
are met and confirmed, benefit compensation is generally limited to a
predetermined percentage of income.
Income protection insurance does not provide health or
medical care coverage. It also will not
pay a death benefit to surviving family members if the policy holder dies as a
result of his or her injury or illness.
This highlights the fact that income earners that have families that
depend on their income to meet financial obligations should also invest in
health insurance and life insurance.
Purchasing an income protection insurance policy is a prudent decision
for those that wish to protect their family’s financial interests in the event
of an unexpected or sudden injury or
illness that results in the loss off their income.
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