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Stressed? Taking On Too Much Work, We All Do It But We Neglect To Protect Our Income.
Author : James White
As humans, our greedy driven nature has led us to create technology which provides information all but instantly, with this technology comes greater workloads and longer hours. It probably comes as no surprise that an increased workload and longer hours leads to greater stress levels.
Now this comes to the reason I am writing this article, with us all under greater strain and stress being one of leading causes rendering an individual unable to work has income protection ever been more important.
Permanent health insurance or as it is also commonly known, income protection covers lost income if you are rendered unable to work due to serious illness or injury. The facts are very interesting, as expected although low, approximately half the population have some level of life insurance, and a limited proportion of the population have protection against loss of income over and above that which is statutory.
Following a deferred period, the time period between starting the claim and receiving the benefit if you are still unable to work you will start to receive a regular cash sum, often monthly to replace a proportion of your income, the proportion paid out is dependent on the level of cover you initially selected when the policy commenced and any other incapacity benefits you may be receiving.
The benefits provided by the state protect you to a certain extent should you be unable to work due to ill-health or disability, the issue with state provision is that it is often only a very small proportion of your lost income.
Statutory sick pay and state incapacity benefit, and possibly income support, are only sufficient to ensure that the minimum standard of living is possible. With ever-increasing standards of living in the UK and the state benefits not following suit in their value, claimants often cannot support the standard of living they are used to. As bills continue to role in every month many find paying their bills and general debts wipe away their state benefit leaving little if any spare cash for necessities such as food and clothing.
So I come to ask why don’t more individuals have a level of permanent health insurance? Permanent health insurance is also commonly known as income protection and tends to get forgotten when considering financial protection. The income protection market is well established with a variety of insurers providing a wide range of products. When choosing a product you decide the percentage of income you would like to cover and the length that the protection would payout for. Most policies set a maximum level of cover at 65% of your income, less state benefits. As with anything, the more comprehensive the product i.e. the greater level and length of cover you choose the more expensive the rates. The length of term on a policy can cover for as little as 2 years or right up until your retirement age.
Another important consideration when buying a plan is the deferred period, with a permanent health plan you have the option to select how long after illness or disability has been diagnosed you are willing to wait before the plan starts providing replacement income. Deferred periods can range from as little as four weeks up to as long as a year.
Often it is best to align this with any sick pay from your employer or the period where a proportion of your savings could cover you monthly financial obligations. The deferred period is another factor which affects your monthly premiums, the longer the deferred the cheaper the premiums will be as it will require you to be off for a longer period before the insurer must payout.
Other factors to consider when quoting including whether you are a smoker and your occupation. There are three main occupation definitions, own, suitable or any occupation. A policy which is based on your own occupation will pay out if you are unable to do your normal job whereas a policy written on any occupation will only payout if you are unable to do any paid work.
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Article produced by James P White of Drewberry Income Protection Insurance helping individuals find the long term income plan and self employed protection insurance they require
Article Source:
Articlebliss
Tags: permanent health insurance income protection
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Submitted : 2010-08-17 Word Count : 724 Popularity: 67 Times Viewed: 13
