Income Protection Insurance ensures you can continue to pay your mortgage, household bills and living expenses whenever you are unable to work due to accident or illness.It  is very tax efficient and provides an ongoing income of up to 75% of your normal salary whenever you are unable to work due to any accident, illness or disability until retirement age.

Income Protection Insurance  is an insurance policy, available principally in the United Kingdom and Ireland, paying benefits to policyholders who are incapacitated and hence unable to work due to illness or accident. IPI policies were formerly called Permanent Health Insurance.

Income Protection Insurance

Income protection insurance, is pretty self explanatory, as it protects your income. It can pay you upwards of 75% of your income in the event you were unable to work. Reasons may include illnesses, major traumas or accidents. It will protect you for the length of you time you are off work and, depending on your occupation, if you are unable to return to work, it continues payment until you retire (age 65). The most obvious reason for insuring your income is so that you can continue to provide for those that depend on you. That includes paying the mortgage, buy groceries and carry on financially until you return to work.

Do You Need It?

As with any decision to insure something, it truly depends on what impact its loss would have on you. In the case of income protection insurance, you are insuring your income. So the question is what impact would losing your income have on you. Would losing your income mean being unable to pay mortgage; support your children; or, continue to save for your retirement? Obviously those questions are irrelevant if these aren't a concern in your life at this point. For younger people just starting out, chances are these are not going to be an issue and other insurance products, like critical illness insurance, may be a wiser investment. Even forgoing this insurance and simply saving and investing the money you would otherwise be spending on premiums can be smarter.

There is definitely some redeemable aspects of income protection insurance, but it truly depends on your current financial situation. Having this financial situation assessed by a professional advisor is the surest way to know if income insurance protection is smart choice. Far from being a salesperson, today's insurance brokers are licensed professionals who are there to help and guide you with your financial decisions.

Income Protection Insurance protects you from lost wages if you become ill or disabled and are unable to work. It is important to know the key features, benefits and costs of the policies that you are going to take out.

Income Protection Insurance policies generally include protection on such things as credit cards, loans, mortgage payments and in some cases even complete loss of income. When you take out a policy you will have the ability to choose how much coverage you would like to receive. The amount is usually capped off at 60% of your earnings. There are several reasons why this cap is in place. The main reasons that the cap is in place is because the benefits that are paid to you are not taxed. It is also considered that there must be some kind of incentive for you to return to work once you have become well or are in good health. If there were no limit to the amount that you could receive it could be said that potentially the payments could cover you until retirement.

It is important to consider the definition of “unable to work.” Typically this is considered to be; your inability to do the job that is typically done, your inability to do a job that is similar and being unable to do any type of paid work.

An Income Protection Policy can be taken out for several reasons. Two of those reasons include an illness or disability that has rendered you unable to work. There are however conditions in which you may not be able to collect payment from this type of policy. They include; pre-existing conditions or any illness that you had prior to being issued the insurance policy. This is because the provider assumes a risk will be incurred. You may not be covered if you participate in dangerous sports which are not included in the policy or that are part of the agreement that is made between you and the provider. All forms of substance abuse including alcohol and drug abuse will not be covered under such a policy. Other things that are not covered under the policy include child birth, pregnancy and self-inflicted injuries. Make sure to check with your provider to see what types of illnesses or disabilities are considered under the policy. The best policies will provide insurance for a job that is “normally” done. These generally cost more but provide better benefits. You may also find that “partial or “rehabilitation” payments are offered if you are only able to return to work on a part time basis.

There are many unforeseen things that happen in our lives. One of these conditions includes unemployment due to illness or disability. Having the option of purchasing Income Protection Insurance takes the burden off of you. You will have the peace of mind that you will have coverage and supplemented income while you are unable to work. There are many companies and providers that offer quotes and it is important to do your research to find the best quote for you. Be aware of any limitations or exemptions in the provider’s policies. Ask questions and make sure that you fully understand the policy before making any final decisions. Having this type of insurance and being aware of what it offers is a great financial preparation.

If you have further query feel free to contact Canada Insurance Plan.