One of the characteristics of a successful person is the ability to anticipate future events. Aside from developing good habits such as putting the important things first, working on one’s circle of influence, and expanding that circle of influence, one should have the ability to anticipate future events and to prepare a contingency plan to assuage the impact of life’s concomitant risks. Because of life’s associated risks, people have devised ways to mitigate the impact of the occurrence of risks. Likewise, private companies have worked around the concept of risks and anticipated the impact of these risks, capitalizing on these risks in their form of business. For this reason, there are a number of private insurance companies that have sprouted like mushrooms, peddling around insurance policies that are purportedly designed to mitigate the effects of risks involved in life. Hence, we got life insurance, car insurance, and many more. One of my favorite among these insurance policies is the “Income Protection Insurance (IPI). IPI has been gaining a lot of attention nowadays because many people have gradually become pragmatic in their approach to life. Moreover, there are benefits and restrictions associated with IPI, and in this article, these benefits and restrictions are given emphasis.
Benefits and Restrictions
I guess the primary benefit of IPI is the fact that it assuages and mitigates the impact of incapacitation due to illness or accident. You will receive up to 75% of your total salary in case you are incapacitated to perform your work due to illness or accident. This means that you will have extra money to sustain yourself during the period of incapacitation. Likewise, these benefits are paid either weekly or monthly. Moreover, these benefits are tax-free. Additionally, the insurance company cannot renege in providing you these benefits as long as the policyholder has been continuously paying for the premiums.
Restrictions of IPI
There are restrictions associated with IPI and it would be good to know these accompanying restrictions. First, insurance companies do not really pay out the benefits if the policyholder is ineligible for the IPI. Say for instance, if your incapacitation is not related or due to illness or accident. Second, if the deferred period of the IPI is usually a bit long. Sometimes it would be a minimum of four weeks, with the maximum period of 52 weeks. The longer the deferred period is, the lesser the premiums. Moreover, certain exclusions are usually associated with IPI. Say for instance, if your incapacity to work occurs because of your use of alcohol or drug, or because of your performance of a criminal act, wars, pregnancy, and intentional self-harm, you will never be entitled to Income Protection benefits.
There are also requirements to change your premiums if you change your employment or become unemployed. Moreover, the new risks involved in your present situation often affect the amount of premiums that you are going to pay. Lastly, if the benefits stipulated in the policy become higher than the income of the policyholder, the benefits are reduced to reflect the present income of the policyholder.
The positive effects of IPI is indeed best felt if one becomes incapacitated due to illness or accident, and availing of IPI can be a good investment in life. If you want to learn more about IPI, you can readily visit http://lisagroup.com.au/income-protection-insurance/australia – income protection Australia.