Top 5 Factors to Consider When Choosing Income Protection Insurance
There are four types of insurances that financial experts say every person should have; life, health, long-term disability, and auto insurance. One kind of disability insurance is income protection.
Income protection insurance is exactly what it sounds like. These policies protect those who have lost income due to an accident or illness until they can return to work.
How can you get this coverage? Read on to learn about choosing income protection insurance.
1. Advice From a Professional
The best route for choosing income protection insurance is to take the advice of a professional financial planner. These individuals can help you come up with a budget that won’t affect your current lifestyle.
This will be the money you can afford to spend on an income protection insurance provider.
Because there are different options for insurance, you are going to come across different companies with different benefits. Your goal should be to find the best services with a low to average premium.
Never stick to the first website you find for insurance, instead start comparing insurance costs from multiple places. These are the factors to consider when choosing a policy:
- Monthly benefit
- Maximum income coverage
- Benefit period
- Waiting period
If you are using an insurance comparison site to look through different policies, check that the information correlates with the insurer’s site. You can find cheap income insurance to address unforeseen problems in the future.
3. The Types of Insurance
You can figure out what is included in a policy by reading the insurance terms and conditions. However, you should have a general idea of the income protection insurances out there before signing anything.
The premiums you need to pay will depend on the type of policy you buy. When buying income insurance, you’ll quickly learn that the two main types of policies are Indemnity value and Agreed value.
Indemnity is the more affordable option out of the two, but the benefit will depend on the income you earned 12 months prior. Agreed value is expensive but comes with a full benefit assurance.
If you speak to an insurance provider, they are going to focus on the benefits more than the negatives. You’re smarter than that, which is why you should learn about the exclusions of a policy beforehand.
The exclusions will explain what a policy does not cover to save you stress down the line.
5. Pre-Existing Medical Conditions
Just as you expect an insurer to be honest with you, you should be honest with them. Reveal any pre-existing medical conditions you may have during the application process.
When you omit these factors, an insurer has the right to turn down your claim. It’s more than likely that an insurer will find out about your condition regardless.
Choosing Income Protection Insurance Is a Breeze
When you follow the tips in this guide, choosing income protection insurance will be easy. As long as you do the research, read the terms and conditions, and disclose your medical information, you’ll be in good hands.
Find which insurance policy is right for you now to protect your future assets and more. Don’t forget to come back for more articles with advice on personal finance.