A serious illness or injury can have a huge impact on your finances. You probably have health insurance which would cover your medical expenses, but do you have income protection insurance? Health insurance covers your medical expenses due to a medical condition, but you need an income protection in New Zealand in order to have protection against lost income due to a medical condition.
Income protection insurance is optional insurance that is in the best case scenario provides a piece-of-mind so that you will not have to worry about lost income due to loss of work for medical reasons. And in the worse-case scenario, it provides a benefit payment of 75% of your income for a prolonged period of time, when you are not able to work for a medical reason.
Income Protection and Qualify of Life
This insurance is recommended for those people who need their income to maintain their current quality of life. It is probably hard to imagine how your life would be affected if you lost your income because of a medical condition. Would you be able to live in your current home if you became disabled? Do you have other bills, for things like schooling, which you would be unable to pay if you lost your income? If the answer is yes, then you should give income protection insurance some serious consideration.
There are different types of income protection policies. They can vary depending on your needs and your specific situation. For example, a commissioned sales person might opt for a different policy than someone who has a more stable income. Also, different policies can make differentiations between what is considered a disability. Each policy will have a specific waiting period to specify the amount of time you must wait, after becoming disabled, before you will start receiving your benefits. Generally, this period varies between 1 and 3 months. You also select the period of time that your benefit will be paid after the loss of work. The choices are normally 2 years, 5 years or up to 65 years of age.
The price of a policy will vary depending upon the variables discussed above, however in general this type of insurance is more expensive than medical insurance. In addition, income protection insurance costs less for a non-smoker. As with all over insurance policies, it is important that you understand the policy completely before signing on the dotted line.
There are restrictions that apply to these policies. Benefits are not granted if the loss of work is due to a self-inflicted injury, any criminal activity or a pregnancy, unless there is a complication of pregnancy lasting longer than 90 days. Also, you need to consult your advisor if your work situation changes to make sure you have the right type, and right amount or coverage. A change in your job could have an effect on your policy.
Lastly, keep in mind that income protection plans are protection for loss of income due to medical reasons only. This coverage is not for someone who is no longer working because of redundancy or if they are fired.
Try to imagine how drastically your life would change if you became ill and were no longer able to work. Not only would there be a mountain of medical bills to be paid, but you would no longer have your income from your job. An event like this will have a negative impact on virtually all aspects of your life. If maintaining your current quality of life is contingent on your current income, you should get an income protection insurance in New Zealand quote today. Taking action today can make all the difference in your world tomorrow.