Why You Need Income Protection Insurance

With predictions of a second global financial crisis making headlines, the number of people seeking income protection insurance in case of unemployment has risen considerably. Credit rating agencies are forewarning about a bigger financial crisis which is expected to have a harder and deeper impact than the previous one especially on Asia and Australia. As a result, the fear of losing their regular income is haunting both workers and businessmen.

Income Protection Insurance: Features And Benefits

Income protection insurance comes to the aid of workers who are unable to earn their regular income due to illness, accidents or injuries. In general, people depend on their income to meet regular financial needs except for the rich upper class. The sudden loss of regular income can lead to a financial crisis, with devastating effects on their lifestyle.

Income protection insurance covers up to seventy five percent of income, in case a person is incapable of earning regular wages. To claim the benefits, the policy holders will have to prove that they are incapacitated and unable to perform an occupation that is suited to their educational and training level. The benefit is paid after a deferred period, the time between the claim and actual commencement of payment.

Income protection insurance typically covers:

* Mortgage payment
* Credit card payment
* Payment of bills
* Day to day living expenses
* Medical and rehabilitation costs
* Maintenance costs for businesses

The insurance companies tailor the policies to meet the specific risk profiles based on the occupation. Income protection policies are able to meet the specific needs of white collar workers, blue collar workers and self employed people.

How Income Protection Insurance Can Help during Global Financial Crisis:

Generally income protection insurance does not cover unemployment due to redundancy but income protection policies are flexible and can be customized to meet the current crisis situation and needs.

With the predictions of a second global financial crisis, the threat of unemployment is looming large which has led to surge in inquiries about income protection in case of unemployment due to redundancy. To meet the crisis, insurance companies have come up with policies to meet the specific need of the current financial situation. On an average, a policy holder pays approximately two percent of their annual income as premium for the policy. For a higher premium, a worker can get income protection which will cover involuntary unemployment, lying to rest the looming fear of loss of income due to recession.

How To Choose The Perfect Policy

With wide array of policies available for different types of income protection, the task of choosing the right policy is tough. Every policy will have different terms and conditions for the claims, which if overlooked can lead to loss of requisite coverage. The premium charged for this kind of insurance will depend on several factors like:

* Age
* Gender
* Pre-existing health conditions
* Addictive habits
* Deferred period
* Benefit period
* Additional features of the policy

It is sensible to visit a reliable website which provides information on income protection coverage available, premium rates and deferred period of the policies. The online calculators available on the websites can help you find the best suited policy for a specific income type, based on the information you provide. Insurance companies also provide free insurance quotes to help customers make the right choice.

It is sensible to protect yourself from the upheavals caused by the global financial crisis with comprehensive income protection insurance which is tailored to suit the specific income group and current financial situation.

Increasing Coverage While Maintaining Low Cost Life Insurance

There are several good reasons why it is important to review your life insurance coverage periodically. For one thing, when you took out a policy your financial situation was different from what it is today. You may have got married, had additions to your family, got a new job or risen in rank and position at your place of work. Assessing your current financial position will help you adjust your life insurance coverage so that your death benefits will adequately cover your family’s financial needs and keep them well-protected even after you have gone.

Why should you consider increasing your life insurance coverage? Here are a few reasons to review your life insurance coverage:

Marriage. Many people choose to take out a life insurance policy when they are single. This works out to your advantage as the younger you are, the better chances you have of getting premium rates. When you get married, you should consider increasing your life insurance coverage to make sure your surviving spouse is protected against financial loss in case you die an untimely death.

Starting out your life together, you and your spouse may want to consider purchasing a house or beginning a family. You should increase your death benefit to cover the loss of your income, any outstanding debts you may have such a mortgage, and future expenses such as retirement. This may amount to paying a higher premium, but it will ensure that your spouse will not be left in dire financial straits trying to pay off loans and struggling to make ends meet.

Children. The first time you should consider increasing your life insurance coverage is when you get married and the next time you should consider an increase is when you have children. Having a child means a lot more joy in the home, but also a lot of added expenses. You should consider your child’s education fees and college tuition in your death benefit. This amount can be kept as an endowment for your child. With each additional child you have, remember to review your life insurance coverage and make the necessary increase. Your death benefit should include your salary for a number of years, the cost of day care along with education fees and other household expenses you incur within a year. If you cannot increase your coverage to include all of these expenses, you should try to increase the coverage as much as your budget permits.

Getting a hike in salary! A raise in salary should be followed by an increase in life insurance coverage. Why? When your salary gets hiked, you automatically begin enjoying a higher quality of life. Your death benefits should be increased to cover the higher lifestyle that your family will get used to.

Calculating your life insurance coverage

You’ll find online life insurance needs calculator an easy way to arrive at how much life insurance coverage you need. You will need to estimate costs of various categories of expenses. The categories are added up to give you the total amount of life insurance coverage your family will need. Subtract the amount of life insurance you already have. The balance left will give you the amount you need to purchase.

How can you bump up your existing coverage? Ask the life insurance company or the agent who sold you the policy to find out how you can add more life insurance coverage to your existing policy. But remember you do not need to add to your current policy. You could purchase a new policy from a different life insurance carrier. Many people have multiple life insurance policies through different carriers. You would need to mention the various life insurance policies you already own when applying for a new one.

Whether you add to your current coverage or purchase a new life insurance policy to your portfolio, you will need to go through an underwriting process. You may be required to go through a medical and disclose personal information regarding your finances, occupation, etc.

Getting low cost life insurance!

Remember, too, to shop around and buy life insurance online. This is the most convenient and quickest way to get low cost life insurance! Most people don’t realize that life insurance is a competitive business. Rates may differ from carrier to carrier. Some life insurance companies may also offer free riders that could save you money in the future. For instance, if you have a waiver option, your policy will not lapse if you miss a payment. Always shop around for the best bargains and purchase your policy from life insurance companies who have excellent financial strength and ratings to prove it.

Online insurance providers allow you access to instant life insurance quotes. You’ll get the best life insurance quotes from carriers who have an excellent reputation for payouts. Receiving multiple quotes allows you to compare life insurance rates and products. Many of these online life insurance providers also offer their professional services. They can answer any questions you may have about life insurance, identify important issues and present meaningful recommendations to you