People of all age group must consider income protection insurance. You will realize the benefit of this kind of insurance is when you have become jobless or are unable to work because of some injury or temporary sickness.
As per the agreement signed for the income protection insurance, you will continue to receive payments, for example two years, five years or up to the age of 60 or 65. You will get more cover if you are paying larger premiums or depending upon the insurance plan.
Income protection scheme is definitely beneficial for a young single person who does not have any dependants to rely on him. If he or she dies, income protection or critical illness insurance could be the most relevant type of insurance for his family. This kind of insurance is good for someone when s/he is not able to meet up the costs of the living. Besides, in case of a death, the family will receive a payout as a nominee.
You may decide the income protection insurance as per the salary that you want to insure. Generally, this kind of insurance will cover up to 75% of your salary in the even of illness or injury that prevents you from working. The basic idea behind getting income protection insurance is to provide an income stream when you are no longer at work
Shop around with different insurance companies to know about the types of cover and prices available. Premiums will be calculated on the basis of following factors
Age – premiums may increase or cover decrease as you are getting older.
Health and pre - existing conditions
The time waited before starting to receive payments.
Prices vary depending on age and other factors, but income protection can cost around one week’s salary per year (premiums are generally tax deductible).
Before signing for any insurance policy, always make sure that you have understood the terms and conditions very carefully and you are investing your income in the right manner.