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Income Protection Insurance The Basics Joey Foreman
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Statistics of a research activity conducted in New Zealand reveals that about 85% have car insurance and about 50% have life insurance while a mere 11% of them have income protection insurance. Does this underline the fact that income protection is not as important as either car insurance or life insurance is? The idea of dying is difficult for anyone to digest. But as head of the family it is important for an individual to ensure that his/her family does not suffer post the death of the individual. Also, it is always not death. An accident can render an individual disabled for the rest of the lifetime. How can a family deal with a situation where the primary bread winner has been incapacitated and is unable to work and earn money on a monthly basis? It is exactly here that the income protection insurance policy comes in handy. Normally, when an accident or a critical illness occurs the chances of a person being disabled are higher than the chances that the individual may pass off. When a person is disable so much that he is unable to work or look after a personal business the income source for a family takes a beating. Life insurance and health insurance will yield money only upon death and that too would be a lump sum. Income protection plans help individuals receive monthly amounts on being incapacitated either by an accident or by a critical illness. The individual can rest and take care of everyday expenses, cater for rents and other bills that are essential to run a family. Hence, it is very important for individuals to have an income protection insurance policy. Though the importance of this policy is not stressed by insurance companies, it is in the own interest of the individual to know such policies and buy one so that individuals can have peace of mind, if something unforeseen were to happen to them.