8 Major Income Protection Myths Debunked
8 Major Income Protection Myths Debunked
Insurance products aren't easy and simple of things to understand and income protection insurance plans are no exception. With cumbersome key points booklets and the media citing stories of context-specific consumer-insurer battles, it's no surprise that many people misunderstand the thing it is and what it specifically offers.
Outlined allow me to share eight major protection myths demystified, in order that next time you hear something about income protection, you can actually separate fact from fiction. policy
Myth 1: It won't pay out
Provided that the policyholder has kept up-to-date using monthly premiums, and has given truthful personal information from the outset, claims happen to be paid out. In fact, last year in the UK, insurance providers paid over 90% of successful claims. Should you be still unconvinced and want to make sure specific insurer payout rates, many now provide easily-accessible claim statistics on their websites.
Myth 2: It's not affordable
This myth is solely subjective. If you were a smoker in a high risk job and wanted a very high level of cover, your premiums would, needless to say, be costly. For the majority however, income protection is reasonable and can cost less than 30p per day. If you want significantly low income protection insurance quotes, consider buying through a commission free broker or by extending your deferral period - how much time between a claim being made and also the money being paid out. Premium rates are calculated depending on your age, health, smoker or non-smoker and occupation, so if you are serious about cutting the costs of premiums, it could be beneficial to adopt living. Income Protection
Myth 3: It is a waste of money
In terms of ill-health and injury, people can feel a sense of invulnerability, and so it's all too easy to see how this type of myth circulates. But ask anyone who's used their income protection policy, and they will be the first to debunk this notion. Had you been unable to work on account of illness or injury, the monthly instalments supplied by income protection becomes invaluable, affording reassurance that bills, loan instalments, and any other expenses could continue to be financed during your days off.
Myth 4: It is not necessary if you receive benefits
Statutory sick pay along with other benefits tend to pay no more than �400 a month, which for some, would not cover the rent or mortgage. Earnings insurance policy however, would pay to 75% of your usual income, comfortably covering the costs of your living.
Some employers provides a more comprehensive benefit than statutory sick pay. Therefore, it's important to check if this applicable; as this may mean that your deferral period can be extended which can, therefore, lower premiums.
Myth 5: It does not take same as PPI
Whilst they may sound similar, income protection and payment protection insurance (PPI) are not the same products. PPI insures a particular loan repayment, whereas income protection is designed to cover a portion of one's income. If you found yourself not able to meet your mortgage repayments due to ill health, PPI will be on hand for this, but how about all the other inevitable expenses? This is how income protection will come in.
Myth 6: Time spent if you have critical illness cover
Whilst critical illness insurance coverage is important, unlike income protection, it wouldn't pay out if you were not able to work due to injury or if you developed a non-critical illness. Because of this, income insurance will be worth considering along with critical illness cover, because this would cover a bigger range of eventualities.
Myth 7: It is not for you if you're self-employed
Self-employed people can get income protection insurance, but be prepared to provide the relevant documentation. In case you are self-employed, your income may be more variable, in order that it would be beneficial to regularly review your policy to ensure that you're covered for the amount of money you require.
Myth 8: It will require too long to apply
Whilst this will likely have been true dads and moms of dial-up-internet and telephone brokers, because of user-friendly websites, it is now easier than ever to search, compare and purchase income protection policies.
Insurance products aren't easy and simple of things to understand and income protection insurance plans are no exception. With cumbersome key points booklets and the media citing stories of context-specific consumer-insurer battles, it's no surprise that many people misunderstand the thing it is and what it specifically offers.
Outlined allow me to share eight major protection myths demystified, in order that next time you hear something about income protection, you can actually separate fact from fiction. policy
Myth 1: It won't pay out
Provided that the policyholder has kept up-to-date using monthly premiums, and has given truthful personal information from the outset, claims happen to be paid out. In fact, last year in the UK, insurance providers paid over 90% of successful claims. Should you be still unconvinced and want to make sure specific insurer payout rates, many now provide easily-accessible claim statistics on their websites.
Myth 2: It's not affordable
This myth is solely subjective. If you were a smoker in a high risk job and wanted a very high level of cover, your premiums would, needless to say, be costly. For the majority however, income protection is reasonable and can cost less than 30p per day. If you want significantly low income protection insurance quotes, consider buying through a commission free broker or by extending your deferral period - how much time between a claim being made and also the money being paid out. Premium rates are calculated depending on your age, health, smoker or non-smoker and occupation, so if you are serious about cutting the costs of premiums, it could be beneficial to adopt living. Income Protection
Myth 3: It is a waste of money
In terms of ill-health and injury, people can feel a sense of invulnerability, and so it's all too easy to see how this type of myth circulates. But ask anyone who's used their income protection policy, and they will be the first to debunk this notion. Had you been unable to work on account of illness or injury, the monthly instalments supplied by income protection becomes invaluable, affording reassurance that bills, loan instalments, and any other expenses could continue to be financed during your days off.
Myth 4: It is not necessary if you receive benefits
Statutory sick pay along with other benefits tend to pay no more than �400 a month, which for some, would not cover the rent or mortgage. Earnings insurance policy however, would pay to 75% of your usual income, comfortably covering the costs of your living.
Some employers provides a more comprehensive benefit than statutory sick pay. Therefore, it's important to check if this applicable; as this may mean that your deferral period can be extended which can, therefore, lower premiums.
Myth 5: It does not take same as PPI
Whilst they may sound similar, income protection and payment protection insurance (PPI) are not the same products. PPI insures a particular loan repayment, whereas income protection is designed to cover a portion of one's income. If you found yourself not able to meet your mortgage repayments due to ill health, PPI will be on hand for this, but how about all the other inevitable expenses? This is how income protection will come in.
Myth 6: Time spent if you have critical illness cover
Whilst critical illness insurance coverage is important, unlike income protection, it wouldn't pay out if you were not able to work due to injury or if you developed a non-critical illness. Because of this, income insurance will be worth considering along with critical illness cover, because this would cover a bigger range of eventualities.
Myth 7: It is not for you if you're self-employed
Self-employed people can get income protection insurance, but be prepared to provide the relevant documentation. In case you are self-employed, your income may be more variable, in order that it would be beneficial to regularly review your policy to ensure that you're covered for the amount of money you require.
Myth 8: It will require too long to apply
Whilst this will likely have been true dads and moms of dial-up-internet and telephone brokers, because of user-friendly websites, it is now easier than ever to search, compare and purchase income protection policies.