Why it is Important to Compare Income Protection Options

Why it is important to compare income protection options

As increasing numbers of families are finding it difficult to cope with low incomes and ever-increasing expenses – and putting away savings for emergencies is becoming almost impossible – more income providers consider taking out some kind of income protection insurance to prevent even greater hardship in the event of them becoming ill or being made redundant.

Income protection policies come in various forms. Some are taken out for short periods only. These short-term options usually provide cover in the event of unemployment, as well as covering inability to work as the result of illness or injury. In most cases, these policies will only pay out for comparatively short periods, usually for a maximum of about two years.

Long-term policies rarely cover redundancies, but will normally pay out a percentage of the family’s gross income for longer periods. These options are based on different circumstances, with some of them paying out if the insured individual suffers an injury or illness that leaves them unable to return to work in their normal job. Others will only pay if the policy holder can not work in any type of job, with providing companies often trying to assist the individual to return to work in whatever job is suitable as soon as possible.

A third type of cover does not pay out unless the person is unable to perform simple daily tasks, like getting dressed and washing themselves. Other forms of policy will not provide an income, but pay for regular bills, or pay off a mortgage. Naturally, premiums will vary depending on the type of policy selected and the amount of cover required. In order to determine the most suitable option, it is important to carefully compare income protection solutions of varying types and from a variety of providers.

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