Income protection

Income Protection

With such an uncertain economic climate at the moment everyone is doing everything they can to make sure they are in a strong financial position should the worst happen. But with everyone rushing to make these plans and take out all sorts of insurance and protection cover it seems a few unscrupulous people out there are taking advantage of the public panic to protect themselves and their families by selling them insurances and protection they don’t actually need or that won’t pay out if the worst happens as they will not meet the criteria. With so many buzz words flying around in the financial world how do you know which products to buy in to and which to avoid?

Income protection seems to be one of the key word and financial products flying around at the moment, but do we all need it and should we be purchasing these policies? Well the simple answer is yes; unlike many products out there income protection does actually provide what it promises to and can help you if life takes an unexpected twist. As well as this income protection is suitable for all whether you are employed by an international company, a small local company or even self employed.

So what is income protection insurance and what does it actually provide? Simply put income protection, protects your income! It provides an income for you if you are ever out of work due to sudden illness or injury, however most policies do not pay out if you are made redundant. The basic idea behind income protection is that it keeps you on the same financial footing you would be on if you were working, thus taking one worry off your mind and allowing you to concentrate on recovering. One really good aspect of income protection insurance is that the income you receive is completely tax free.

To avoid people making a profit from this insurance you would receive you’re after tax earnings with a deduction for any state benefits you can later claim. As with all insurance it is important to read the fine print to make sure you know exactly what you are covered for by your income protection policy.