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8 Major Income Protection Myths Debunked

Insurance products aren't the simplest of things to understand and income protection insurance coverage is no exception. With cumbersome key facts booklets and the media citing stories of context-specific consumer-insurer battles, it's no surprise that many people misunderstand exactly what it is and what it specifically offers. trauma

Outlined listed here are eight major protection myths demystified, to ensure that next time you hear something about income protection, you are able to separate fact from fiction.

Myth 1: It does not pay out

Provided that the policyholder has kept up-to-date using their monthly premiums, and has given truthful private information from the outset, claims have been paid out. In fact, last year in the UK, insurance providers settled over 90% of successful claims. If you are still unconvinced and want to verify specific insurer payout rates, many now provide easily-accessible claim statistics on their own websites.

Myth 2: It's too expensive

This myth is purely subjective. If you were a smoker in the high risk job and wanted a very high level of cover, your premiums would, of course, be costly. For the majority however, income protection is reasonable and can cost as little as 30p per day. If you want significantly lower income protection insurance quotes, consider buying through a commission free broker or by extending your deferral period - how long between a claim being made and the money being settled. Premium rates are calculated according to your age, health, smoker or non-smoker and occupation, and if you're serious about cutting the price of premiums, it may also be beneficial to adopt a healthier lifestyle. life

Myth 3: It's a waste of money

In relation to ill-health and injury, people thinks a sense of invulnerability, and so it's too easy to see how this type of myth circulates. But ask anyone who's used their income protection policy, and they can be the first to debunk this notion. Had you been unable to work because of illness or injury, the monthly instalments supplied by income protection turn into invaluable, affording reassurance that bills, loan instalments, and any other expenses could remain financed during your time off work.

Myth 4: It's not necessary if you receive benefits

Statutory sick pay and also other benefits tend to pay no more than %uFFFD400 a month, which for many, would not cover the rent or mortgage. Money insurance policy however, would pay up to 75% of your usual income, comfortably since the costs of your living.

Some employers will give you a more comprehensive benefit than statutory sick pay. Therefore, you need to check if this applicable; because this may mean that your deferral period can be extended which can, therefore, lower premiums.

Myth 5: It is the same as PPI

But they may sound similar, income protection and ppi (PPI) are not the same products. PPI insures a certain loan repayment, whereas income protection is designed to cover a portion of your respective income. If you found yourself can not meet your mortgage repayments due to ill health, PPI will be on hand for this, but what about all the other inevitable expenses? This is how income protection also comes in.

Myth 6: Time spent if you have critical illness cover

Whilst critical illness insurance coverage is important, unlike income protection, it would not pay out if you were unable to work due to injury or you developed a non-critical illness. That is why, income insurance will probably be worth considering along with critical illness cover, since this would cover a broader range of eventualities.

Myth 7: It isn't really for you if you're self-employed

Self-employed people can get income protection insurance, but be prepared to provide the relevant documentation. In case you are self-employed, your income may be more variable, so it would be beneficial to regularly review of your policy to ensure that you're covered for your amount of money you require.

Myth 8: It will take too long to apply

Whilst this could have been true mothers and fathers of dial-up-internet and telephone brokers, due to user-friendly websites, it is now increasingly easy to search, compare and get income protection policies.
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