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Profession & Income Protection

It is mainly those people in highly paid professions who need income protection insurance. This is because those who are making a significant amount of money usually have a lifestyle to match. If they are suddenly without their income due to illness or injury, then their lifestyle would suffer. They would be unable to pay their bills and may have to sell off many assets.

In fact, suddenly having no income would be devastating for most people, but those who do not have much disposable income are used to economising. They do not usually have quite as much to pay out and could probably eke out an existence on a disability pension.

But those with a profession would not qualify for a disability pension, so they need to have income protection instead. And after all, income protection would certainly be the preferred alternative.

There are usually three grades of income protection insurance; standard, comprehensive and professional. The premium for each one is different, with standard being the less and professional the most. Professional income protection is usually taken out by white-collar workers who have careers with a higher income bracket. They pay more, but they also get additional benefits such as emergency domestic travel.

The standard cover is the most affordable and will cover the cost of your bills if you cannot work for some time due to injury or illness. The comprehensive cover offers the additional benefit of paying for the cost of rehabilitation and child-care assistance. This is of particular benefit if the mother is a high income earner and is injured. However, when income protection is taken out it is usually only for one income, so this should be the highest income if both parents are working.

That is not to say that both income providers in a family cannot choose to take out income protection, but it will need to be in two separate policies. In each case, income protection insurance needs to be reviewed on a regular basis to ensure that it will continue to meet changing needs.

Always be sure you read and understand all the details of your income protection policy before you sign on the dotted line.


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