Learn more about income protection insurance from scratch

by Income Protection Insurance May. 05,2023
Learn more about income protection insurance from scratch

Income insurance can also be called income loss insurance, disability insurance, disability income insurance, etc. This type of insurance is used to protect the economic losses of the insured. Payment of income security insurance is subject to certain conditions, and it is compensation insurance for the insured person who is disabled or loses part or all of his working capacity due to 'accident or illness, and is unable to obtain normal income or reduce income from work.


Purpose of income protection insurance


1. In economic terms, the insurer can benefit from financial protection. It does not target medical expenses incurred by the insured due to illness or accidental injury, so only after the parties have lost their ability to work for a period of time, the insurance company begins to pay the insurance money.


2. Relieve the economic pressure she and her family face. With such a guarantee, when an accident occurs, there will be no loss of human resources, which can significantly ease the pressure on the family due to the accident.


Income insurance payment method


Compensation is usually made on a monthly or weekly basis, and monthly or weekly income compensation can be provided with the same amount. Disability insurance payment should be linked to the income level of the insured prior to disability.


Income insurance payment period


The income insurance payment period refers to the maximum time for the policy to pay insurance premiums. The payment period can be short term or long term:


1. Short-term compensation aims to compensate for the loss of income of the insured who cannot work before the body recovers, and long-term compensation consists in compensating for the loss of income of the insured who is completely disabled and unable to return to work.


2. Most disabilities are short-term disabilities, the recovery period generally does not exceed 12 months. For the elderly, it is more appropriate to choose a longer insurance payment period.


Different levels of disability benefits are different


1. Completely disabled. Payment for total disability is less than income before disability, often 70-80% of original income.


2. Some disabilities. Certain invalidity benefits are calculated according to a fixed formula and specific insurance standards must be consulted with insurance companies.


Questions That Need Special Attention When Purchasing Income Protection Insurance


1. It is necessary to see the terms of the contract in the income guarantee insurance. Whatever type of insurance you purchase, you should read the contents of the contract carefully to avoid causing your own losses.


2. Find a large regular insurance company. Regular insurance companies are more trustworthy, and the sales staff of regular insurance companies will be more professional and explain the pros and cons of purchasing income protection insurance.