Insurance has helped us in a lot of ways, more than we could ever imagine. Being able to relieve us of our financial burdens during the unexpected turn of events like death or critical illness, and providing us benefits from purchasing the said insurance plan, gives us the opportunity to live life in a manageable manner. If you’re looking for an insurance policy that acts as a financial backup for when you are sick, you can try invest in income protection insurance policy Malaysia.
What is income protection insurance?
A monthly income will be provided to you by income protection insurance if you are unable to work as a result of a sickness or disability. This income will continue until you either return to paid employment or retire. Income protection insurance is also known by its alternative term, permanent health insurance.
Do note that this insurance only covers for a period of time until you are able to return to work, or until you retire. Also, there will be a difference between the amount of money you were generating before you were forced to quit working and the amount of money that can be claimed as your income.
You should expect to keep anywhere between 50 and 70 per cent of the money you make before taxes from the normal employment you have. This is due to the fact that a portion of the money will be withheld in order to pay for the benefits that you are eligible to receive from the government, while the money that you get from the insurance is exempt from taxation.
Moreover, you can’t get payments from income protection right away if you get sick or hurt. Most of the time, you have to wait at least four weeks, but payments can begin up to two years after you stop working. This is because you might not need the money right away if your employer gives you sick pay or if you can get statutory sick pay for up to 28 weeks after you stop working.
What should I consider before buying income protection insurance?
Disclose any relevant medical history details
Please provide your insurance carrier with all of the information that they have requested. When you submit a claim, the insurance company will look at your medical history to determine how to best handle the claim. If you were dishonest or gave incorrect information on your application, or if you lied about something, it is possible that you may not be granted the necessary financial assistance.
Adjust your coverage to your needs
There are three primary types of insurance, each of which provides benefits under certain conditions:
- Your own job is something you can’t do because you can’t perform your own work. This normally costs the most, but it’s also the most probable option to get your claim settled.
- You are not able to do your current work or one that is comparable and matches your skills and experience.
- Because of your illness, you are unable to engage in any form of productive activity. This is typically the least-priced choice, but there is a greater likelihood that it will not pay off in the end.
Examine the fine print
Read the application carefully and fill it out. Make sure you understand what is and isn’t covered. Be aware that different insurance companies can have different rules about what is and isn’t covered. You can ask the insurance company, an insurance broker, or a financial planner for help if you don’t understand something.