When should I get income protection? 8 cases to consider
In short, income protection insurance is designed to cover your expenses if you become unable to work due to a severe illness or injury. It is a way to protect yourself in case your savings or sick pay from work cannot ensure that you’ll be able to maintain your life on the same level.
Apart from this type of insurance, you may also consider getting a life or illness insurance policy, depending on your individual circumstance. Below, you will find information about eight cases when income protection should be your choice, including being self-employed, running a small business, having other family members or dependents that rely on your income, and paying off the mortgage or debts, among other things. Read on to figure out if you need this insurance policy!
If you are self-employed
If you are self-employed, you are in a risky situation. In most cases, you can’t get sick leave or short-term disability pay from your employer. That’s why it’s imperative to have your own income protection policy in place.
Even if you have an employee who can take over the work while you cannot perform it yourself, income protection will cover your expenses while you recover. If you want to be a successful entrepreneur, it may be the perfect type of coverage for you.
If you have dependents that rely on your income
Being a parent comes with many responsibilities. One one of them is providing for your children. However, you’re never really safe from the possibility of being unable to work because of illness or injury.
If you want to ensure that you can provide for your family in case of such a situation, income protection is one way to go about it. A good plan will cover all your necessary expenses so that you don’t have to worry about scraping to find some extra cash until you can work again.
If you have a small business
If you own a small business, then income protection is also a must-have. In this case, it’s especially vital since most small businesses don’t offer sick leave payments or disability insurance. Income protection will replace part of your lost income and give you peace of mind. Make sure you use it to your advantage and reap the benefits it provides.
If you are paying off the mortgage or debt
If you have a mortgage or other debt that you need to make payments on every month, income protection may be just the right choice for you. After all, no one should worry about paying off their debt when they are unable to work. If you have lost the ability to work because of a severe illness or injury, income protection will cover your expenses until you are back at 100%.
If you are still finishing college or university
Income protection is also something to consider if you are still finishing college or university. In such a situation, you don’t yet have a stable source of income which can be problematic.
Additionally, many students rely on loans and scholarships. It means they can end up owing thousands of dollars if they cannot finish their studies for some reason. If your medical condition has prevented you from graduating college, income protection might be the best option to cover your expenses.
If you got laid off from your job
Another occurrence when income protection is an excellent choice is when you get laid off from your job and need time to find another one. If you suffer from an illness or injury that prevents you from working and landing a new job position, income protection will help with covering your expenses until you get better. Then you can continue paying for the policy monthly until it expires and live happily, knowing that if anything happens, your income will stay protected.
If you like traveling and want a little extra safety net
Some people like to travel but don’t feel safe enough when they do so without an income protection policy in place. This insurance policy can come in handy as an extra safety net for those who often travel for business or pleasure but don’t want to pay huge sums of money for travel insurance policies. If something terrible does happen, income protection can cover healthcare costs and other expenses. This way, you don’t have to worry about them and can instead focus on making your trips as memorable as possible.
If you have other health issues along with your disability
Although disability insurance is not the same as income protection insurance, they are similar and are often used together for maximum coverage benefits. Disability insurance typically covers the loss of income due to a disability, while income protection is designed for the loss of income due to any medical reason.
Anyone with a disability should get disability insurance or an income protection policy. It is important to do so if you have other health issues along with your disability as well. For example, someone who has diabetes along with their disability may be more likely to develop other health complications in the future, which could affect their ability to work later on. In such a case, disability insurance and income protection will play a crucial role in maintaining financial stability.
The bottom line
Once again, income protection insurance should be a priority for anyone who doesn’t have a stable source of income or is self-employed. In addition, anyone who has family members or dependents that rely on them financially should consider getting income protection as well.
Income protection insurance is one type of insurance that you don’t want to do without. Although it might seem like an unnecessary expense, it can be pretty beneficial when your health situation gets worse. No matter what stage of life you’re at, take a few moments to think if you need this type of policy. It might save you a lot of trouble in the future.
