If you’re young and healthy, income protection is unlikely to be something you’ve considered – you might not even have heard of it! But regardless of your age and health status, there are many benefits to having income protection.
Let’s take a look at what it is and why it’s worth it.
What is income protection and how does it work?
Put simply, income protection is a type of insurance that pays out if illness or injury leave you unable to work. This is why young, healthy individuals tend not to think too much about it, as you might not have imagined something like that happening to you.
But illness can happen to anyone, and injuries can occur unexpectedly, so it’s important to think about how you’d manage financially if you suddenly lost your ability to work.
You have to wait for a certain amount of time after you stop working to claim income protection. This period is typically at least four weeks, though be aware that it can last longer. After that, income protection can help to support you as you recover and get ready to go back to work.
If you run a business, you have the option to protect all your employees from the unexpected with group income protection. If someone is off sick for an extended period of time, group income protection pays them a percentage of their salary each month. This means that both you and your employees can be confident that, if anything happens, they won’t be left to struggle.
Why Do You Need It?
Income protection is usually paid out until you return to work, so you don’t have to worry about money if illness or injury forces you to take time off.
With group income protection, your employees are supported to return to work as soon as possible. So not only is it a great way of looking after employees’ health and wellbeing, but it can also help to keep your business running smoothly.
There are a range of income protection plans to choose from, so you can pick one that suits you. Income protection is not a ‘one size fits all’ kind of insurance – it’s up to you what it pays and how long for. Keep in mind, however, that costs may vary depending on your health and lifestyle, and what kind of job you have.
For example, income protection for someone who smokes may be more expensive than for a non-smoker. Or, if your job involves a lot of manual labor, you’re likely to find yourself paying more than someone who works in admin. This is because some jobs are deemed to have a higher risk of injury than others.
If your job increases your injury risk, income protection is crucial, as you don’t want to find yourself having to take time off work without pay. Likewise, if you employ people in high-risk roles, you don’t want them rushing to get back to work too soon and potentially making their injuries worse. With income protection, the return to work occurs at a safe pace.
As you can see, income protection is always worth it, even if you are young and healthy.
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Author: Edwin Owusu Peprah from Net Worth Hack.