Do you Need Income Protection Insurance? Yes You do, Says Expert Financial Advisers!

Income protection insurance - word injury, illness or accident

After an illness or accident, you can no longer work.

illness or accident - Income Protection Insurance

Income Protection Insurance – Illness or Accident

In the event of illness or accident causing disability for a long period of time, the indemnity you receive from the mutual insurance company will not likely allow you to maintain your lifestyle. Guaranteed income insurance, also known as disability insurance, allows you to receive an annuity in this type of situation, that is to say a sum of money that the insurer will pay you periodically (for example, all month) for a certain period of time in the contract or until retirement age, to compensate for your loss of wages in case of disability. Rarely, the insurer may instead propose to pay the principal (a single amount of money paid in a single installment).

Who can take guaranteed income insurance?

Guaranteed income insurance is for everyone (independent, salaried or civil servants). All persons engaged in work may be insured under the guaranteed income insurance scheme up to the age specified in the insurance contract.

What is covered?

For employees, three situations must be distinguished:

  1. You suffer an accident at work: compulsory occupational accident insurance taken out by the employer must intervene.
  2. You suffer from an occupational disease: it is compulsory insurance for occupational diseases which will occur via the Occupational Diseases Fund. This type of insurance is part of the social security system.
  3. You suffer from non-occupational illness or have had an accident in the course of your employment. It is compulsory insurance for social security which will be deployed via mutual or auxiliary fund. A guaranteed income insurance can also be concluded by the employee to receive additional compensation for what is not covered by social security. Sometimes employers offer this type of insurance in their salary package. Nevertheless, this insurance will never cover accidents or occupational diseases.

For the self-employed, the system of accidents at work of employed persons does not apply. There is no compulsory system of insurance for occupational diseases. Occupational and non-occupational diseases and any occupational or private accidents are covered by social security, but the level of compensation is limited. To be able to cope with a loss of income due to incapacity for work, a guaranteed income insurance can be subscribed by the self-employed.

Civil servants, on the other hand, are subject to a special status, both in regard to occupational accidents and occupational diseases.

Income Protection Insurance- annuity or principal will be determined based on your remuneration

How is capital or annuity calculated?

The annuity or principal will be determined based on your remuneration and expenses (i.e, your fixed costs, irrespective of leisure money) and taking into account the compensation that could be paid by the mutual.

Whether you are employed or self-employed, if you take such insurance, the amount you receive will in any case be calculated on the basis of the insurance premiums you have agreed to pay.

When can you get compensation?

The insurers pay the annuity or the capital in case of disability caused by an illness or an accident of the insured. Disability must be certified by a physician.

 Income Protection Insurance - CompensationThe contract generally provides for a waiting period (this is called a waiting period), and it is only at the end of the waiting period that you will be able to collect the annuity or the capital. This period is generally approximately 30 days from the first day of disability, as declared by a doctor, but may be higher, for example in the case of people over 60 years of age. This period is indicated in your contract.

If you want to take an income protection insurance policy on an individual basis, ask your insurance company about the waiting time in the contract.

The income protection insurances offered may vary widely from one insurer to another. It is therefore in your interest to inquire with your insurer about the cases in which you are covered. It is also possible to request, in some cases, an extension of guarantee according to your risks. For example, it is possible to request an increase in the waiting period (waiting period) to decrease the amount of the premium.

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