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Income Protection

The Premiums you will expect to pay vs. the amount of cover you receive.

In certain circumstances, adjusting your lifestyle just a fraction of making the slightest improvements or changes can really have a significant effect on the cost of an insurance policy, especially one that provides financial stability if you are unable to work due to injury or illness. Income protection, life insurance and critical illness insurance policies all work like this.

One important thing to remember is the type of premium you should take out, flexible or guaranteed. In any case, over the long- term, guaranteed premiums are the safest bet as you know exactly what you are paying each month and you are not subjected to unexpected fluctuations in the price of your premium that you can encounter with flexible premium prices. Fixed prices ensure that you can build your finances around your policy and account for your premiums well in advance so that it becomes routine.

How much cover you would need is a factor that you need to think long and hard about, having a direct reflection on the price you will have to pay for premiums. The industry average is to take out insurance for between 2/3 or 3/4 of your gross annual salary, however you have to look at all your monthly outgoings in detail before you decide on a final figure to insure against. It is important also to take into account everything that you currently pay out for such as weekly shopping bills, petrol, child costs for school, clothing, spending money, trust funds and so much more when calculating your monthly outgoings.

Being careful not to place your figure to high or low, as you nay experience problems in having your policy paid out in the way you expected or in a quick enough time frame to offer you the assistance you need when you need it. An important point to remember as well, insurance policies relating to financially covering you, such as critical illness and income protection insurance, they will not pay out until after a period of waiting, which is usually set at 2 to 4 weeks.