Income Protection Insurance Serves The Needy
It is quite common for people to face problems unexpectedly and unemployment and illness are the common ones to name a few. Now the insurance companies have taken up the task to protect these people and this is how Income protection insurance has come into emergence. Through this scheme, the person is eligible to get the same amount of money which he got before being unemployed or ill.
It is quite common to find companies closing down at any moment and this means the employees become jobless. Similarly a company can decide at any moment to send away a few staff members because of financial crisis and again employees can become jobless. These issues are quite common at any nook and corner of the world. In the same way, an employee may fall sick at any moment and lose his regular flow of income as employers will never entertain a sick employee. Keeping all these issues in mind, insurance companies have come forward with many plans to deal with such issues. A person who pays premiums enjoys the non-taxable income while he is in risk and this amount will be the same as what he has been drawing in work. This contribution is usually calculated as 50% -65% of your total earnings received before paying for taxed income.
When the person becomes unemployed, the insurance company agrees to pay up to a certain period of time. It could be for short-term covering about 12-24 months. This helps people to be on their self financially and also gives them the time to search and find another job. You also have one to two years to hunt for a new job and this turns out to be advantageous because you find enough time to find a suitable job. These types of coverage is also for covering mortgage loan, a vehicle loan or credit line repayment which would have ended you up in court if you were not punctual in repayment.
Well you also have long term income protection insurance given mostly to sick people who are chucked out of their jobs and as a help to them till they avail their pension. This usually serves for long time as in most cases the employee may be suffering from fatal illness and needs a lot of money for his/her medication. This also depends on how much you are willing to contribute and can be as long as even five years, fifty years or sometimes even up to sixty years.
This type of Income protection insurance is a boon especially to people who are single and without any dependents as it caters to all their needs. This insurance is modulated keeping in mind the people who lost jobs due to illness or unemployment.
