INSURANCE

When you find yourself off work for an extended period of time, anyone becomes concerned with the lack of income. That is, of course, unless you have income protection insurance. Now, while income protection insurance costs will offer you a payout depending on how much money you make, you will not be given the total amount of your income from your job. If you got 100 percent of your income paid to you when you were out of work, why bother returning? The point is, you will receive a percentage per month based on your income that will be enough for you to pay for expenses as you see fit, but not enough for you to lose motivation to return to work.

The Payout

Let's think for a moment about filing your claim. First of all, you can't just get a job then enjoy an early vacation when you "become sick" after getting income protection insurance. Most insurers for this type of cover will not allow you a payout until you have been employed with your job for about 6 months, so don't get cover and think you have a free pass to get out of work when you have a sore throat. This cover is intended for people who are the primary income providers for their household, and losing this income would be detrimental to their lifestyle and the comfort of themselves and their families. You also might be denied a payout if you fail to mention upon purchase of an income protection insurance policy that you have a pre-existing illness. Basically, you could lose your payout if you keep anything from your insurance company, so don't risk it. Get the cover you need so that you can get the payout you want.

The payout amount will vary between insurers, but generally you will be given 50-60 percent of your income per month, or 2,000 pounds per month, whichever one is lower. This is seen as enough money to support you and your family's expenses while you get better and recover from your sickness, disability, or injury. Keep in mind that you will not be given a payout if you are simply let go from your job; your reason for temporarily leaving must be related to health problems. If you just leave your job, there will be no payout and you will have been making payments on this cover for nothing.

What it Pays For

With your 50-60 percent of your income being paid to you monthly, you will be able to pay for whatever you need to pay for. The beauty of income protection insurance monthly payments is that there are virtually no restrictions on what the money can be used for. If you need to pay for groceries, clothes for your children for school, or anything else, you can. The money is yours to spend as you need to. You must always keep in mind that you will be getting a fraction of what you were getting by working, so you may have to make some adjustments to your lifestyle while you are using income payment protection insurance. Don't go to the store and just buy all the things you used to buy thinking that your payout will cover everything. If you run out of money during the month because you overspent, you will have to wait for the next month, or simply work harder on getting better so you can return to work. Don't overspend, and don't take advantage of the insurance. Return to work and start making the money that you're used to.