All about Income Insurance
Income insurance is generally referred as income protection insurance. It is the type of insurance which ensures that you get the benefits when you become unable to generate income for yourself or your family. It will make sure that your limitation does not create a lot of troubles and tensions for you. It helps you in living your life peacefully. The benefits under this type of insurance are tax free and ensure that you get the maximum benefit you deserve.
Features of income protection insurance
The most important feature of income insurance is that it is only available when you have temporarily or permanently, lost your ability to earn income due to accident or illness or any other reason stopping you to earn sufficient income. It does not take other factors like personal problems and lack of job opportunities in concern. Basically, it is not an insurance which will give you money for your unemployment. It will only provide benefits when you are willing to work and your ability to work has been hampered by a physical disability. The second most important feature of this type of insurance is that the benefits received under income insurance are tax free and you get the full amount as decided earlier. Another important feature is that this insurance has a time period i.e. you will get the benefits only for three or four years after the disability or till age seventy. The maximum limit of the benefits is nearly 75% of your current income. However, it may be less depending upon the level of income you have. If it is high, the limit of the benefits will be less than 75%.
Limitations of Income Protection Insurance
This policy is not applicable in a situation where the policy holder is out of job due to any other reasons except illness or an accident. The income insurance policy can be ended when there is a change of occupation or you are unemployed for a reason other than illness or injury due to accident. Also, the benefits can be reduced depending upon the income of the policy holder from any other source during the disability period, be it state benefits or benefits from a part time job will comparatively lower income. Also, the tax exemptions on the policy can be reduced as per the circumstances. However, despite all these limitations, income insurance is very vital to your financial security and future management.