Income Protection Insurance: The Benefits

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Article published on 14th July 2008

Income Protection Insurance policies can offer numerous of benefits when compared alongside other sorts of insurance policies like accident, sickness and unemployment policies and payment protection policies.

Payments from Income Protection Insurance policies come when the policyholder can no longer work for his or her usual income, and each policy will stipulate under what conditions this takes place (illness, redundancy and so on). After a deferred period has passed, agreed in advance by the policyholder and the insurers, and then continue until the term of the policy runs out, or until the policy holder returns to work, or retires, or, at a worst case, dies.

Income Protection Insurance payments are usually paid on a weekly or monthly basis and are tax free. The insurance company cannot cancel or refuse to renew the policy provided that the policyholder continues to pay the premiums.

With many Income Protection Insurance policies there is an option to waiver premiums while you are claiming on the policy. The logic here is that if you are claiming on your policy it is because you do not have your regular income anymore and so cannot pay the premiums in the first place. There's no point in claiming on a Income Protection policy only to hand that money back to your insurers in the form of premium repayments! If such a waiver is in place the policyholder will not have to pay premiums while he or she benefits from the IPI policy but the policy cover will continue as normal.

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