Renewable IPI
Income protection insurance, or IPI, is available in several forms to suit various lifestyles and financial circumstances. With renewable IPI, your contract is renewed after a certain period of time, often 5 years. Each 5 years, your personal risk factors are taken into account, and you may be charged a higher rate for your cover. Renewable IPI may be an appropriate choice for young professionals and working parents who are on a tight budget and expect to have higher earning potential in the years ahead.
Fixed premium IPI is the standard for income protection insurance. With a fixed policy, your premium payments neither rise nor fall throughout the duration of your contract. At the end of your contract, you may have the option to renew your cover. However, rates may be increased due to age, a decline in health status or a change in occupation.
Benefits of a Renewable Policy
Single professionals, working couples and families can benefit from income protection insurance, a form of financial protection that pays out to replace a portion of your income if you cannot work due to an illness, injury or prolonged disability. The tax free benefits of IPI are paid out weekly or monthly and can continue until your contract ends, or until you go back to work, retire or pass away. Many households rely on IPI to pay bills and cover basic living expenses if the primary breadwinner is made unemployed by a serious medical condition.
Income protection insurance providers cannot cancel a policy or refuse to renew your cover unless you stop paying your premiums. A renewable policy offers a greater sense of reassurance to policyholders who will need to protect their household financially for the foreseeable future. In the beginning of your cover, you will pay a lower premium for IPI than you would pay for fixed premium insurance.
Having the opportunity to save money for the first few years of coverage is one of the primary reasons for choosing renewable IPI. However, you must take the overall cost of your coverage into consideration when you choose any type of income protection insurance. Because you may require IPI throughout the course of your working life, it is important to compare policies in order to choose the plan that will save you money over time.
Terms of Renewable Insurance
With renewable IPI, your insurer may re-assess your rates each time your contract is renewed. Your new rates will be based on your personal risk factors, including age, profession, health status and hobbies. If you have switched from a lower risk occupation to a high risk profession, if you have contracted a serious illness or if you have taken up a dangerous sport, the cost of your cover may rise. Reviewable IPI is similar to renewable income protection insurance, except that rates for reviewable cover are increased based on general rates.
As with other types of IPI, renewable income protection insurance benefits are payable only if you become unemployed due to illness or injury. Excluded health conditions include pregnancy, substance abuse, self inflicted injury or injuries due to war or terrorism. Because your IPI benefits are not subject to income tax, other tax benefits may be reduced if you receive IPI payouts.
Renewable IPI can be a valuable component of your family's emergency preparedness strategy. However, you must review the term of cover carefully to avoid paying more than necessary for your coverage over the course of your career. Calculate the total costs of renewable IPI over the next 10, 15 or 20 years to determine how much you will pay for your cover altogether.
Financial Protection
When You Need it Most
We're Protected. Are You?
What People Are Saying
With the help of this site, I was able to find a very affordable income protection policy. Comparing quotes and finding a rate was very easy.
Oliver B, Liverpool UK
