For Whom Income Protection Insurance is Suitable?

Income protection insurance is so designed that it caters to the needs of the insured and his family when he is not able to go to work due to some kind of illness or injury. It is a monthly benefit which is provided and is in fact a replacement of the salary. The government also provides the state benefits like that of the statutory sick pay and incapacity benefit that is way below the average earning of the individuals which makes supplementary income a necessity to reduce the gap. Most of the income protection policies are designed to be in place till the retirement age of the insured which means from the current age of the policy holder till his/her retirement.
The income protection insurance is not for those people who tend to lose their jobs often as it does not provide the benefits in such case. This policy is good for all those who are not able to go to work due to some medical reasons or when they have to be at home to take care of their children for some time due to unavoidable reasons. The benefits are payable when there is inability to go to regular work due to reasons as defined by the insurance companies. These policies are not intended to be health insurance and hence do not provide any death benefits or coverage for any kind of critical illnesses. In any case, if the policy holder considers it appropriate he can take separate health insurance, life insurance or coverage for critical illness along with income protection insurance.
The income protection benefits are available for 2 years, for 5 years and even till the age of retirement. The income provided by the insurance companies is equivalent to 75 to 85 percent of your annual salary or the taxable income. Most of these policies have waiting period which you can choose on your own. The waiting period is for 30 days, 90 days, 180 days or 365 days. The benefits get paid after the waiting period of making your claim. The claim is paid for the number of days you have been out of work after the waiting period. However, different policy makers have different rules and one should be aware of these before taking up the plan. Income protection insurance is a sigh of relief when you are out of work due to medical reasons.