Best Income Protection Insurance – What To Consider
Finding the best income protection insurance may seem like a daunting task if you are not a financial expert.
If you are confused about the complexity of the different policy features and benefits when you compare income protection policies, you are not alone. Buying your income protection should never be rushed.
It is important to have a clear understanding of your insurance needs and how an income protection insurance product should meet these needs.
Evaluating your income protection needs
You cannot choose an appropriate product if you do not know what your needs are. Some of the things to consider include the amount of coverage you need – this is the amount that you would need to comfortably meet your monthly expenses. However, note that typical income protection policies only cover up to 75 percent of your monthly salary. You will also need to consider the waiting period that would be appropriate for you, which will probably be based on the amount of savings you have. You should also think about the benefit period and note that these factors will all count towards your premium rates.
Choose the type of policy
There are two main types of income protection policies to choose from. The first is an indemnity value policy that pays a percentage of the salary you were earning at the time of your claim. The second is an agree value policy, which pays an amount that is set when you take out the policy, so the benefit amount does not change with your income. Note that indemnity value policies are usually cheaper than agreed value policies.
Price of the policy
Even if you find the very best insurance has to offer, it will mean nothing if you cannot afford it. The price of a policy is a major consideration for an insurance buyer. You need to ensure that you will be able to keep up the premium payments so your cover is not cancelled. Fortunately, you can easily compare income protection products from different providers using online income protection quotes. Identifying a number of policy products that you can afford should be the first step when shopping for the insurance.
If you are looking for the cheapest cover for income protection, you can look into your superannuation and find out whether you can obtain this type of coverage via super. The policies are usually bought in bulk, which means you get to enjoy better rates. In addition, getting insurance via super comes with the added benefit of automatic underwriting and no medical tests.
The terms of the policy should be given careful consideration when determining the insurance for you. For instance, finding out the definition provided for disability and whether your insurer is allowed to cancel or change the terms of the policy later on could be critical to your cover. Speaking to an insurance specialist or your financial planner is also recommended when you need clarification on the different policy products and terms.