Income Protection Insurance as Insurance Against Incapacitation.

Article published on 14th July 2008

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Income Protection Insurance (IPI) is a kind of insurance policy that pays a stipend to policyholders who have been incapacitated and are unable to work due to accident or illness, and sometimes because of being made redundant (so losing a job through no fault of your own).

Income Protection Insurance policies used to be called Permanent Health Insurance (PHI).

Generally, definitions of 'incapacitated' tend top be if, a) the policyholder is unable to perform his or her own usual occupation while also not working in another job, b) if the policyholder unable to work at any sort of job they might be qualified or experienced working within following accident or illness, and c) if the policyholder cannot perform any job whatsoever due to is incapacitated if they are unable, following illness or accident to perform any occupation at all.

The most usual testament to incapacitation taken by insurers tends to be if the policyholder cannot perform 'activities of daily living' (ADL's) as a result of some sort of accident or illness. These activities of daily living's include things like dressing, undressing and washing oneself, eating, walking up the stairs, cooking and so on. Each Income Protection policy will define the sorts and number of functions, their definitions and their 'level' of absence in order to be eligible for a payout on the Income Protection Insurance policy.

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