One of the most important types of life insurance is the income protection insurance coverage policies that a lot of Australian insurance companies offer. The over all general idea is to provide for a financial payment that is equivalent to up to 75% of the monthly income that a person makes at the time of any critical illness or disabling injury.
We all maintain a standard of life. That standard often is directly proportional to the kind of money that we make every month. Generally, we have kids to support and provide for their education and standard of life we have to provide for the future of ourselves and our spouse and any other dependents on a long term basis. When we are working and bring home a sufficient amount of monthly income, we never face issues meting our expenditure obligations. Our standard of life is well maintained and we can be confident about life and thing that it can throw at us. All of this is true to the extent that we are in good health and remain in good working conditions for years to come. Problem starts when we are down with any critical illness or any disability that impairs us and prevents us from going out and working. This means our steady income every month is stopped and the start of a deep financial crunch.
Every time we have a promotion and our monthly income increases, prudence is in increasing our life insurance coverage along with it. The reason is that with each increase in income we tend to increase our spending budget as well. We start living a higher standard of living. If at any point of time later on there is an untimely disablement of the major income earner, the family faces a major financial crisis maintaining the standard of living. Not to mention the incidental costs of treatment and rehabilitation that will be necessary.
An income protection insurance coverage has a lot of benefits which can be summarized here. The first and foremost thing about income protection insurance is that the financial support that is available immediately upon the disability being diagnosed and the insured is out of work. The result is that at no point of time the insured or his family has to go through a major financial burden for the reason of his disability. He can concentrate on getting his treatment and rehabilitation and spending time with his family.
Another type of income protection is the TPD insurance coverage that deals with total permanent disability. This is a little different to that of temporary disability that deals with injury or a critical illness which can be treated and the person can get back to his work after a rehabilitation program. In TPD or total permanent disability the insured is permanently disabled and can no longer work to provide for his family.
Certain tips to consider while deciding on an income protection policy
Check out the time for which the policy will remain in force. It is ideal to plan for a working life remaining and accordingly select a policy that will cover your entire working life. If you are a professional man working as a CPA or a doctor there can never be a retirement age really. In that case consider a policy that will cover your best working years. Also check the critical illnesses that are covered by the policy. Always compare as much as possible online and then speak to an agent about the offers that he has. Compare the insurance quotes from different companies and accordingly decide which policy is best suitable for your case. If you life a specific lifestyle you can even speak to your doctor about the kind of illnesses that you should take coverage from. Although it is hard to tell what you will contract in advance, but a couch potato needs to be weary of acute diabetes and chronic diseases as those are very common.
Check the conditions under which the insurance company is going to accept your claim. While some insurance providers will not consider your claim if you are incapable of performing your normal occupation and capable of performing others, other insurance companies are not that strict. Having these things cleared out before hand will help to avoid problems in claiming later on.
If your insurance company is not willing to provide a non-cancelable insurance policy, try some other options. Cancelable policies give the insurance companies an option to refuse renewal of the policy in a future year. As your age progresses you will be more likely to contract critical illness. You need your insurance coverage more than ever at that time. If the insurance company reassess your health conditions and decides not to renew the same you will have problems.