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What is income insurance? Income insurance is the protection of any income you currently receive usually being the income from your place of employment, your job. Should you not be able to work for any reason due to illness or injury an income insurance company will compensate you and pay your monthly wage for the number of years set out in your insurance policy, there is no set number of years it depends on the insurance company you are with. Income insurance is also known as permanent health insurance or income replacement cover.
Sounds like a good to get an injury doesn??t it? To get paid the same amount you are earning now and sitting at home doing nothing. However if you have an injury that is serious enough to render you unable to work then anyone will tell you the free money is not worth your suffering.
A major reason why someone would want to get income insurance is to protect any investments they have, the home probably being the largest one, if you consider it an investment, some say it??s an asset, either way people still need to pay the mortgage. All investments require you to put some sort payment into it and if you are unable to do this due to illness or injury then you would have to sell up and all that hard work would be for nothing, income insurance protects all the years of hard work you put into your investments.
Would you need and can you afford income insurance? If you do not own any investments then income insurance is probably not needed, unless you are prone to injury or disease then you may want to consider it. The premium (the amount your pay monthly or yearly to the income insurance company) depends on each particular person??s situation it includes their age, type of work as some jobs are more likely to have an accident than others (e.g. programmer and builder),and medical history. Also the higher your income the higher the premium will be on your income insurance policy.
Income insurance is very useful for the self employed because if you are employed by a company it is likely they will pay your for your time off during your leave, self employed people don??t have this option.
Sometimes having income insurance just puts more damage into your monthly salary and is really not worth the money in some people??s cases, some people would rather keep the money and realize that should anything go wrong with their lives then they are ok with it. You just need to assess your current situation and investment and decide if you can bear to loose them or not.
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