FAQ on Income Protection Insurance

FAQ on Income Protection Insurance

  1. What is Income protection Insurance?
    Income protection insurance is a coverage which can be short term as well as long term and replaces a part of your monthly taxable income in case you are not able to go to work due to an illness or injury. This provides you with an income when you are unable to work due to any disability as defined by the insurance company. This will help you pay off your bills and feed your family.
  2. Is the income protection policy suitable for me?
    If you are working and feel that can be out of work due to some illness or injury then this insurance coverage is a must. It will help you cope with your financial issues when you are not able to go for work. This policy does not pay the benefits if you lose your job but only in case you cannot go to work due to injury or illness.
  3. What is meant when you say “Disabled”?
    Disabled word in terms of income protection is when you cannot go to work due to illness or injury. It also means when you are unable to do the work of your primary occupation which gives you income. When you are not working due to illness or injury and when you are under the care of a doctor, undergoing treatment or have been advised rest by a registered doctor.
  4. “Underwriting” what is it?
    Underwriting is a way in which the insurer assesses your capability of paying for the coverage. They assess your income, lifestyle, age, occupation and then determine the premium that will apply if you take up a policy. They also find out if any special conditions to be applied in your policy like that of exclusions due to high risk.
  5. Has insurer the right to cancel my policy?
    The insurer cannot cancel your policy except in the case of a fraud or under circumstance that you have not fully disclosed the relevant information. Non-payment of premium may also lead to cancellation of the policy.
  6. What is the monthly benefit that I will get?
    Most of the companies provide benefit up to 75% to 85% of your taxable income. However, there is also a set upper limit which can be paid monthly. There are any clauses attached to the benefit payable and the person seeking for insurance should go through all of them to check what he will get when in need.