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Wednesday, 9 October 2013
Income Protection Plans (IPI)
If you couldn't work because of a long term illness have you thought about what you would live on? State benefits are not a real long-term solution (assuming you qualify in the first place). But you can buy an insurance policy that will pay a percentage of your income if you are off work due to illness and it is called income protection.
Income Protection Plans can offer you great benefits when they are really needed.
So what would you look for? Well the first thing is to look for guaranteed premiums. Now these are premiums that are guaranteed not to rise during the term of the policy and without guaranteed premiums the insurer can increase the premiums and the rise maybe quite substantial. Policies that have potential to change monthly costs are known as Renewable premiums
Guaranteed premiums may be more expensive in the early days but are very likely to save money in the long term. You should also check what you have to do in order to make a claim.
Obviously, an acceptable budget will play a major part of any advice process.
Some policies will pay out if you are unable do your own job or a similar one and these are the best kinds of policies to have, others will only payout if you fail a series of tests designed to assess what you can do and in some cases you have to be very ill indeed to trigger a payout.
Before you buy a policy you should check and see if you can get income protection through your work as part of your employee benefits. However, with employee benefits there is usually a maximum time that you could rely on receiving the benefits. Check and double check what your employer offers. It goes without saying you should take advice from a professional broker unless you know exactly what you want.