Calculating For The Right Income Protection Insurance Plan
Most buyers, who opt for income insurance plans
, worry mainly about the price of the policy. Although price is one of the main factors that should be considered by buyers, there are various factors that need to be calculated while purchasing an income protection insurance policy and some of these factors are listed below.
Price of the Policy - Buyers are given various options while purchasing income insurance plans and buyers can choose between policies that range from $6 - $20 a week. No frill insurance plans offer cheap policies for people who are on a budget and these plans offer the basic compensation benefit along with certain other additional perks. The better policies offer many additional benefits such as disability expenses and compensation for a caregiver such as a spouse who cannot go to work to take care of you if you are on bed rest. Buyers who are interested to get the best policy they can afford should consider comparing plans online by using tools such as insurance comparison services. Buyers should also consider using insurance calculator tools to understand how much they will have to pay for the benefits offered.
Insured Amount - The insured amount will determine how much compensation payment you receive when you are unable to work and the insured amount will also determine how much you pay for the selected policy. Before selecting the insured amount, remember to consider your personal requirements such as liabilities, bills and commitments.
Personal factors - Before deciding which income insurance plan is ideal for you and your family, you should calculate your monthly expenses such as bills, loans and mortgages. By doing so you will understand how much you need every month to pay for these commitments. If you have dependants such as children who go to school or elderly parents then you will also have to take these factors into consideration before purchasing a policy.
Waiting period and Benefit Period - Most of the people who plan to purchase an income protection insurance policy overlook the importance of selecting the right waiting period and benefit period. If you do not have money kept aside to fall back on or if you do not too many paid leaves then you should consider opting for a policy with a shorter waiting period. People with dependants and pre existing medical conditions should consider opting for a policy that offers an extended benefit period such as 5 years since this will ensure that the policy holder and his family are taken care of when the policy holder is unable to earn his regular income for an extended period of time.