Income Protection Quotes - Income Protection Quote
When you initially decide you need some form of income protection insurance it will normally be because you realise you have to be reliant on income in order to maintain a certain lifestyle. There are many of us that have financial commitments that have to be kept up with, these could be big things such as your mortgage payment, rental payment, any loans you may have or simply the day to day utility bills. There are also other things to think about such as taking holidays, sporting events you may want to attend and in some circumstances running your car.
We need to be in a position where we can maintain these commitments and this is where our health is paramount to be able to do so. As we all know this is something we cant directly control, we can keep ourselves as healthy and as fit as possible but you cant stop ill health or injury in some circumstances. If this does happen then all the things we have listed above will be affected as you will struggle to maintain payment on them. This will then in turn mean that quality of life will also change for the worse.
It is for scenarios like this that you would consider taking some income protection insurance. The whole premise behind income protection insurance is that it will pay you a tax free monthly income should you find yourself in a position that you cant work because of an illness or an injury. When the money comes to you it will do so as a salary would do normally and it is up to you how you go about spending it. You will often find that in the majority of cases most people cover their main outgoings however the choice of what you actually do cover is up to you. You will also need to take into consideration that the more you do actually cover the more expensive the insurance will be.
Income Protection Quotes
The main points you will need to take into consideration when taking out an income protection policy are completely specific to your circumstances. The first one is the amount of cover you wish to take. This is completely decided by the individual taking out the cover and depends on how much you want to spend per month on the insurance and what outgoings you want to cover. You will need to take into consideration that the amount payable comes tax free and also that any other benefits you may receive such as statutory sick pay will be deducted so you are not in a position where a profit could be made from being off sick.
You will also need to decide as to when you want the policy to cease. This is known in some polices as the retirement date or the finishing date. On some policies the maximum is 68 years of age and the minimum is normally about aged 50. If you take your plan to the year you were planning to retire and you were to make a claim on your plan, this would mean the plan should pay you until you retire.
You will also need to decide if you require the plan to be index linked. When a plan is index linked this means that the amount paid out per month will raise normally with RPI (Retail Price Index) and inflation. The reason you would look at placing a plan index linked is that you will often find that each year the cost of living increases so in the future you will need more cover to achieve the same results as you would now.
In addition to these other important areas you will need to decide as to what waiting period you would like on your plan. Basically the waiting period is when you want the income to start being paid. This choice once again is purely yours and the shorter you ask your deferment period to be the more expensive the cover will be. You can work your deferment period around what standard sick pay you would get off your employers. If your employer gives you 6 months full pay if you are off work then you can chose to have a 6 month deferment period on your insurance. So your employer would pay you for 6 months and then once this stops your income protection policy could start and pay you for the rest of the period it is needed.
When deciding on the total amount for cover on your income protection plan you must ensure the following are taken into consideration, as they will affect any claim you could make on the plan. Good examples of these are payments from the employer, dividends, pension payments, similar insurance plans, state benefits or any other form of income you may get.
You will often find with an income protection insurance plan it is a long term plan and is often confused with a redundancy or unemployment insurance plan that tend to run for 12 month periods. You will find that due to the fact its long term there is the possibility of having many claims during the lifespan of the policy or you could find yourself having one claim on the plan that will go the full duration of the plan up until the policy concludes or you die.
There are often standard exclusions on income protection insurance plans, you will not be able to claim on this type of plan if you are unemployed or made redundant. You will also not be able to claim under pregnancy or normal childbirth. You will also find in some circumstances the plan will not cover you if you work abroad.