During these turbulent times we are living in, pertaining to the Coronavirus pandemic, many people around the world are losing their sources of income. Even those who still have their jobs understand that they could be next in line on any given day. What makes the situation even worse is the fact that the global economy has been hit so hard that it will be extremely difficult to secure a new job nowadays.
Even though many governments are providing unemployment benefits to those in need, there’s only that much they can do to cover the skyrocketing numbers. However, the good news is that you still have some options to provide for your family if or when you become unemployed. Income protection insurance is one of those options that can help you immensely should you ever lose your job as a result of a health problem.
Continue reading below for 6 reasons why you should have income protection insurance:
To Pay Rent
Rent is one of the expenses that you can’t afford to default on; otherwise, you will be losing your family’s shelter. When you get sick and unable to return to work, the last thing you want to be worrying about is the risk of being evicted. Especially with the current economic situation, even landlords are hard-pressed to offer rent-relief to their tenants. From your income protection insurance policy, you can receive a monthly replacement salary throughout your policy’s term. Some people prefer the short-term 2-year plan if they know that their health condition will allow them to return to the workplace. However, if your case is different and you don’t have an exact recovery date, you can go for the long-term policy where you get your ‘salary’ for as long as it takes until you can get back to work.
To Protect your Savings
Upon income loss, most people will usually dip into their savings to provide for their families and maintain their normal lifestyles. However, this is not the smartest way to use the savings that you have worked very hard to accumulate over the years. Since your situation is only temporary, it is better to seek other ways to cover day-to-day expenses rather than spending your savings. If you live in the UK, every year, one million people find themselves in a situation similar to yours, so compare income protection insurance policies to find one that best suits your needs. Many UK insurance companies offer income protection insurance at different premiums and monthly interests. However, there are some factors that you need to consider to make the right choice. These factors include the deferred period before a payout, your pre-existing health condition, and the level of coverage that you need. Once you identify the policy that works for you, you can then rest assured and resume life as usual without sacrificing your life’s savings.
To Make Up for Employer Sick Pay
While some employers offer sick pay benefits to their employees, many don’t. If your benefits package doesn’t include sick pay privileges, take matters into your own hands, and shop for an income protection insurance policy that you can fall back on.
To Pay your Kids’ School Fees
Just like rent, school fees have to be paid on time. If you were the breadwinner of your household but unfortunately lost your job due to illness, you still have to find a way to pay your kids’ school fees. Having income protection insurance can help you out in this predicament and ensure that your kids continue going to school without interruption.
To Pay Off Personal Loans
Regardless of the reason for your inability to pay off your personal loan, committing to your monthly payments is non-negotiable. Otherwise, you can be obliged to hand over your house to the bank as collateral or, worse yet, declare bankruptcy. However, when you have income protection insurance, you can easily use the benefits to maintain your loan payments.
To Assist With Government Unemployment Benefits
If you are self-employed and got into an accident that prevented you from continuing your work, you can apply for government unemployment benefits. However, self-employed individuals in most countries receive fewer unemployment benefits than other employees. To sustain your current lifestyle, you will need income protection insurance to fill this gap and reach your regular monthly salary.
Income protection insurance can offer great relief, especially during the current health crisis. Being able to focus only on your recovery until you can get back to the workplace is a huge privilege. Now that you know why you need income protection insurance do yourself and your family a favor and get one soonest.