Income Protection Cover: What You Should Know – Part 2

Your mortgage on your home is probably the biggest loan that you have ever made in your life. It signifies enormous responsibility and a huge investment. In this shifting financial climate, keeping up with your loan payments could be a continuous worry you may have. Just think, what could happen if you suddenly lost your job, or if you become unable to work because of an illness? How then are you going to pay your mortgage? You can have peace of mind if you take out a income protection insurance policy.

So, how does it work? Given that you regularly pay the income protection premium, you have to make certain that you have sufficient money to wait before you make a claim to the insurance company if ever you ever get sick or have an accident. You should know if your policy’s extent is indefinite, and if it won’t wait until you are employed again. You need to ensure that you recover from your illness and find a job before your policy expires. Normally, policies end after one to two years, but if you wish to pay a higher premium, you can go
for a longer time span. Nevertheless, you do not want to be unemployed for more than two years.

When looking for a income protection policy, you need to know that there is a preliminary exclusion period, which usually takes effect when the contract starts. You cannot file claims within this time period. This one normally coincides with unemployment, and the ruling-out period can last from thirty to sixty days. A so-called excess period also exists and this can be around thirty to sixty days. During this time, you will be prohibited from the claims payment. Often, the company will cover the mortgage. Other related bills like pensions and
insurances will also be addressed by the company. The amount will differ depending on the company.

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