Income cover is a form of insurance that is meant to help you insure your salary in case something happens to it. Just like you may insure your home contents against theft or damage, this kind of policy may help you if your income is affected by an external factor such as:

• accident;
• illness;
• unemployment.

There are three main ways you may use income insurance to get protection in this way. These are:

• long term income policies;
• short term income policies (often known as ASU – accident sickness and unemployment insurance);
• a joint short term and long term income policy.

This kind of insurance works out to be useful for many people. You may not be able to assess if you may ever be made redundant or get sick/have an accident that prevents you from working. In these cases you may well find that your income stops and that you have no significant money coming in.

What might this kind of insurance do for you in these cases? Let’s take a look:

• long term income cover may protect you against being unable to earn your salary because of accident or sickness. This option may pay you a proportion of your regular income for an indefinite period until you are able to get a new job, reach retirement age or die. It may, also, be set up to stop once the term of your policy ends;
• short term income cover may protect you for shorter periods of time. This kind of policy may cover accident, sickness and unemployment. The aim with this option is to give shorter term benefits in situations where you may be able to get back on your feet sooner. So, it may be set up to last for 6 to 12 months, for example. This kind of policy may also come with some useful additional benefits such as advice and help on how to find a new job and get back to work;
• a joint policy basically brings together the two types of income protection to give a complete protection picture. This may be useful if you have no access to sickness, accident and/or employer benefits at work and you are thinking about getting cover on a more immediate plus a longer term basis.

In general terms you may find, as many do, that this product may offer peace of mind and help to protect you financially. If you have a lot of large financial commitments then you may be wise to think ahead and to work out what might happen if you were no longer able to earn your salary, either in the short or long term. Things you may want to consider include:

• how you may be able to manage your mortgage;
• how you might cope with other debt repayment commitments;
• how much you might need for your day to day living costs for both you and your family.

It may well be that income cover may be able to help you with these costs if you do lose your job through redundancy or find yourself unable to work for a while because of illness or an accident.

No related posts.

Related posts brought to you by Yet Another Related Posts Plugin.