All men and women are very much aware they they've to work pretty
much till their last day of retirement (and perhaps even beyond that)
in order to earn their bread and butter. Most of the people consider the
capacity to pool the financial resources as the greatest monetary
asset.
Income
Protection Insurance is considered as insurance policy that ensures
compensation throughout the lifetime in the unfortunate event that the
policy holder gets incapacitated for life-time, and becomes unable to
work because of accident or illness thereafter. IPI policies were
formerly known as Permanent Health Insurance.
By registering with
the income protection insurance, the person can secure almost 75 percent
of his monthly wages, when he is not physically healthy to work for
certain time period.
Men and women who are not certain about the
terms and conditions of the insurance policy can take the financial
advisory assistance. This is because those professionals are very much
willing to help you in managing the monetary resources in right manner.
Benefits of Income Protection Insurance
Income
protection insurance offers you several benefits when compared with the
other insurance policies like accident, unemployment insurance,
sickness and personal accidents.
Benefits related to income
protection insurance are payable when the policy holder becomes
incapacitated. The policy depends upon the terms of contract. Benefits
should be paid on regular basis and are exempt from tax.
Insurance
companies cannot refuse or cancel the policy provided to the policy
holder, if he/she has paid the premium on-time throughout the tenure of
the policy.
Benefit Limits - Usually, benefits are limited
to certain extent or to some percentage of the normal earnings of the
policy holder. The limit will be around seventy percent of gross
earnings. It could be less than 70 % for high earners.
Pricing
- IPI policies are expensive due to the guarantees that are offered by
the policy. Premium decreases as deferred period increases. Options like
'any occupation' and 'suited occupation' or 'own occupation' will
reduce the policy cost.
Taxation
Premiums that are
paid by employers for providing the coverage for their employees are
tax-deductible. Benefit payments that are paid from policy, following
the illness or accident of the policyholder are free of National
Insurance contributions and income tax.
Regulation
IPI
policies are also called long-term insurance and they are regulated by
FSA- Financial Services Authority under the rules of Insurance Conduct
of Business Sourcebook.
This regulation requires insurance company to keep the contract records for 6 months.
