Income Protection will cover 75 per cent of your salary for a period if you’re temporarily unable to work because of sickness or injury (anything not allowing you to continue your work). You will continue to receive 75 per cent of your income until you return to work or to the end of the benefit period.
How much cover is enough ?
A Majority of people will establish Income Protection Insurance for their full 75 per cent of normal income.
The waiting period and benefit period are tailored to find the ideal premium.
How much does it cost?
Income Protection Insurance can be more expensive that Life Insurance, but the premiums are tax deductible. Benefit payments, however, are considered income and therefore subject to tax(at marginal tax rates)
Income Protection Insurance premiums vary according to the following.
- Age(premiums may increase or cover decrease as you get older)
- Gender(rates for females are higher than males)
- Wheter or not you smoke
- Occupation(for example, a manual labourer pays higher premiums to an office worker)
- Waiting periode-the time you choose to wait before receiving payment
- Benefit period-how long you will receive payments in the event of a claim
- Agreeed or Indemnity style policy
- Any extras chosen like ‘increasing Claims’ etc
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