Income Protection Insurance

Income protection insurance is an insurance type that financially supports individuals who cannot work due to an illness or injury. It provides a regular payment that replaces part of your income and there is often a pre-arranged waiting (deferred) period before any payment starts. Individuals who have dependents, a mortgage or other debt, or jobs without sick leave or disability benefits may need income protection insurance. It is important to evaluate your financial situation and consider how losing income could affect them before deciding whether to purchase income protection insurance.

Insurers generally offer income protection insurance to self-employed individuals who work more than 16 hours per week. Income protection can be crucial for self-employed individuals as they typically do not have access to sick leave or other benefits provided by an employer. However, eligibility and the coverage amount may vary between insurers, and self-employed individuals may need to provide additional documentation to demonstrate their income and financial situation. It is essential to check with potential insurers to understand their specific requirements and any exclusions or limitations that may apply to self-employed individuals.

The cost of income protection insurance can vary based on several factors such as the level of coverage, waiting period, age, health status, and occupation. Policies with higher coverage and shorter waiting periods tend to be more expensive than those with lower coverage and longer waiting periods. Other factors that may affect the cost include the insurer’s underwriting process, any exclusions or limitations, and location. Some insurers may offer discounts for bundling multiple policies or being a non-smoker. It is essential to review the policy carefully to understand the costs involved, including any ongoing premiums, fees, and charges.