Lockhart Grey Financial Planning Ltd

Income Protection Cover- what is it?

Income protection cover provides replacement income if you cannot work due to an accident, sickness or unemployment (ASU).

Income payment protection is an often confused insurance product that is part of an often misunderstood and undervalued portfolio of products known as payment protection insurance (PPI).

Income payment protection provides invaluable cover that pays benefits to people who become unable to work due to involuntary redundancy, illness, or accident.  Unlike another product that income payment is sometimes confused with, its benefits are paid out over either a 12 to 24 month period depending on the policy terms and conditions.

Income payment protection insurance is sometimes confused with income protection insurance.  Income protection is more of a long-term product that covers incapacity only.  It has a higher premium cost but pays benefits up to retirement in some situations.  This is quite different than the nature of income payment protection and the portfolio of payment insurance products that are temporary unemployment assistance plans.

Income payment protection does not replace the entire income lost during periods of temporary inability to work or involuntary unemployment, but it does cover a significant portion.  The purpose of income payment insurance is simply to help sustain people through periods of unemployment because there are limited options available to those who rely on monthly income for expense requirements. Certainly, State assistance is often very hard to come by and even if you are eligible for government benefits, the amount you will receive may not, in most cases, be enough to allow you to service all your essential outgoings every month, still leaving you with financial worry every month.

Why should I choose this insurance?

- highly competitive premiums
- excellent cover with very few exclusions
- tax free claims payments are paid between 12-24 months