What Is Income Protection Insurance?

What Is Income Protection Insurance?

Income insurance protection is a policy that protects your income when you are unable to work due to illness or accident. The insurance company will pay you the financial benefits that your policy covers. South Africa is one of the countries where this policy is available. Hence, you are fortunate to have the opportunity to get this kind of financial protection.

The Basics

This protection is similar in nature to the disability insurance policy in the United States. When you are a policyholder of the income insurance protection in South Africa, you will enjoy more security for your finances in times of your illness or recovery from an accident. Your insurance company will pay a percentage of your lost income, usually up to about 75%, from illness or accident.

Why You Need It

If you are earning an income, whether for yourself or for your family, it is necessary that you have this kind of protection. With sickness or an accident that prevents you from working, you will still receive your income with this policy. You need it to:

  • Get the funds you need for your daily expenses
  • Pay for your utility and other types of bills such as mortgage, taxes, and credit card

Without this financial protection, you will have to depend on your savings for your needed funds. You run the risks of savings depletion. Moreover, what if you are not able to save as your income is sufficient to see you and your family through your daily living?

Insurance Coverage

Income insurance protection in South Africa helps you to recognize that you are the most important asset of yourself and your family. This is why reliable insurance providers are underwriting the best coverage possible for your needs.

The policy will cover your finances typically up to 75% of your income with your incapacitation or disability from any of the following reasons:

  • Injury from accident
  • Illness, whether short-term or long-term

If you search diligently online, you will come across some of the best insurance providers that are able to offer up to 100% protection of your income. This is most useful and beneficial if you lack considerable savings, or if you are the breadwinner of the family.

Cost of Insurance

The cost of insurance or the premium rate depends on a number of factors, such as but not limited to the following:

  • Insurance company or provider
  • Amount of coverage and its duration
  • Occupation, gender, and age
  • Medical history

On the average, premium rate is more or less 0.2% of your monthly income or salary. If you are a regular employee, check your employee benefits. Usually, employers include this protection under their compensation and benefits package.

Why You Should Get It

If you are an income earner, it is best that you get this policy protection. This is regardless of your savings or physical properties. Put it this way: you can deplete your savings and physical properties for any reason. However, with your ability to earn an income, you can always re-build. Therefore, it makes sense to protect the most important asset that is your ability to generate an income.

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