Why should you consider income payment protection insurance?
The future is of course unpredictable, I’m sure most of us wouldn’t have it any other way, but sometimes serious obstacles can be thrown in our way. Income payment protection insurance can act as a financial safety net should you lose your job or suffer from serious ill health.
The cover is designed to protect individuals and maintain their income if they lose their job or can no longer work due to ill health. In such a circumstance, unless there are substantial savings in place, it becomes increasingly difficult to meet financial commitments such as mortgage or rental costs, leaving people in an extremely precarious position. Income payment protection insurance pays out a tax-free amount which ensures such costs are met, buying you the time to plan for your future.
There are two types of income payment protection policies currently available from most providers, long term and short term. Long term policies will provide cover when your statutory sick pay period is complete, to ensure you still have a source of income. Short term income payment protection insurance is usually designed to last for a period of one to two years, and covers more specific costs such as mortgages and bank loans.
The benefits of income payment protection insurance are twofold. The claim payment you can receive could save you from a large amount of financial turmoil. If you were to be made redundant how would you meet your mortgage bills? Most people do have some savings, but not enough to keep them afloat for long. Some people will even become homeless as a result of an inability to maintain their living costs.
The second not so widely reported benefit is cover for the costs of rehabilitation. Sometimes this policy clause is included as part of your regular premiums, whilst with other providers it may be available at an extra cost. The rehabilitation cover is designed to help those individuals with income payment protection insurance get back into work; whether that is by covering the cost of rehabilitation treatment for individuals who are off work due to illness, or providing the necessary training for those who have been unemployed for a prolonged period of time and would like a career change.
Although there has been much negative publicity recently following the mis-selling of payment protection insurance by high street lenders, there are many providers who operate in a professional and knowledgeable manner, providing all the information you need up front allowing you to make an informed decision.