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Keeping Financial Worries at Bay with Income Protection Insurance

Posted on December 7, 2011 by admin

Most people who hear about income protection insurance often wonder, what benefits does this type of insurance offer and what is so special about income protection plans? Income protection plans are unique since these plans protect you and your family when you are unable to earn your regular income due to accidents and illnesses. Listed below are a few answers that will help you understand how income protection plans can help you keep financial worries at bay.

What Benefits Can I Get by Opting for a Basic Plan?
Buyers who opt for a basic plan that costs $6-$10 a week will be offered benefits such as limited monthly compensation benefits and one or more additional benefits such as a disability rehabilitation benefit. Buyers who opt for comprehensive plans that cost $10 or more a week will be offered maximum compensation that can add up to 75% of the buyer’s pre tax salary and buyers may also be offered an additional 9% compensation towards superannuation and other salary perks.

How Much Compensation Can I Expect?
The compensation amount received by the buyer not only depends on the type of policy purchased but also the type of contract and the profession of the buyer. For instance, people who opt for indemnity contracts will most likely receive a lower compensation amount compared to people who opt for an agreed value policy. Also, people who earn a higher amount will receive a higher amount compared to people who earn a lower amount. In the terms of percentile buyers can expect to get 40-75% compensation if they opt for good plans.

How do Income Protection Plans Help me Keep Financial Worries at Bay?
Income protection plans provide financial aid to the policy holder when he suffers personal injury or falls ill due to which he cannot go to work temporarily. Policy holders can file a claim for compensation during the benefit period of the contract and depending on various factors they will get monthly compensation payments.

Do I have to Use the Compensation Payments only For Medical Expenses?
Although, income protection plans provide compensation payments to policy holders when they are ill or injured, the policy holder has the right to use the compensation payments for paying bills, household expenses or loans and mortgages. After an income protection insurance claim has been approved by the selected insurer, the policy holder can use the given money to meet any of his daily requirements.