Home Companies Is Income Protection For The Self-Employed Really Worth It?

Is Income Protection For The Self-Employed Really Worth It?

by GBAF mag

Income protection insurance (also called permanent life insurance) is an insurance policy designed specifically to help you in case you become ill or injured without an income. It ensures that you continue to get a regular income well until you are able to return to employment or retire. With this in mind it’s often considered one of the best types of insurance for employees. There are many factors which can determine whether income protection is the best option for you.

Age and location are probably the two biggest contributors to your need for income protection. If you are relatively young, illness and injury are more likely to affect you. Your age means that while you may not qualify for state based disability benefits, the rates to which you will be offered will be higher. If you’re older and have a location which is prone to sickness and accident, then sickness and accident may be more likely to affect you on a monthly basis. An example is that if you’re employed in Alaska and you’re expecting an illness which makes travel a problem then your monthly outlay due to illness could exceed the cost of your Alaska State Income Protection Insurance for twelve months.

The other thing to consider is the type of risk you are facing from sickness or injury. If you have a very small financial investment (such as a savings account) then you may be better off to buy a traditional form of life cover such as Level Term Life or Variable Life. If, however, you have a large portfolio, or if your investments are not liquid, then you’ll be best advised to compare income protection insurance with a direct income protection policy.

As well as comparing the cost of premiums, you will need to compare the length of the income protection policy and the waiting period. Both can have significant implications on your finances. Longer waiting periods mean that you will struggle to make a claim for up to twelve months after the accident or illness occurs. This can lead to significant financial difficulty in trying to maintain the standard of living you had before you became ill. Longer waiting periods also mean that your lump sum payout will be lower once your income protection expires. You could potentially lose as much as a third of your monthly salary if your insurer does not allow a six month waiting period.

When comparing the premiums and benefits of the two policies, it is best to find one that provides the best value for money and is suited to your circumstances. One of the best ways of doing this is by asking for a customized quote online so that you know exactly what you are paying for. A specialized insurer will have expertise in the field and be able to tailor their policies to suit your specific needs. For example, they will usually only include coverage for accidental injury, which is often cheaper than sickness or accident benefits, and will not include income protection for the first few months after termination of employment.

The majority of UK insurers offer online quotes and many of them have a comparison site activequote where you can compare the various options they offer. If you do not live in the UK then you may consider applying for income protection through an external provider instead. Some insurers allow you to apply online while others require that you apply via a paper application. Either way, when applying via a comparison site activequote is often the most convenient and effective way to choose the best provider.

Income protection for the self-employed can be complicated, and the premiums charged can become very high unless the policyholder has exceptional health and/or disability. The best income protection insurance for the self-employed is usually provided by state-funded schemes; however, there are some policies available for the self-employed workers through independent insurance brokers. If you are interested in buying a policy for the self-employed workers, or for the families of such workers, it is essential that you shop around to get the best rates and the best benefits package. Shop online if possible; it is easier to compare a range of quotes from a variety of insurers, and you will receive the best income protection insurance for your needs.

Income protection is an important part of any working agreement. It protects both the employer and the employee, so it is a good idea to have income protection cover even if you are not receiving State-provided unemployment benefits. Not only is this type of income protection less expensive than some forms of State-provided unemployment insurance, it also provides better peace of mind for the employee. If something happened to an employee during the course of their employment, they would want to know that they would still be able to get work. Without income protection cover, they would face losing their source of income should they lose their job.

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