Redundancy can happen at anytime but you can protect against the unknown and the fact that it might happen to you. Income protection insurance would allow you to take out a policy for a fixed premium each month depending on how much you want to protect and your age.
This form of protection insurance should not be confused with income payment protection insurance. Income payment protection insurance would provide you with a replacement income if you were made redundant or were unable to work after suffering an illness or an accident. It would provide you with an income from between 30 and 90 days depending on the provider which would last for between 12 and 24 months.
Income protection insurance would not payout if you were to become unemployed by redundancy. It would cover you in case you should fall ill or if you had an accident that meant you were unable to work. Another big difference between the two policies is that it would provide long term protection, up to the age of retirement if needed. This means that if you fall ill or suffer an accident the cover would begin to provide you with a replacement income and continue to do so right up to you retiring if you could not go back to work.
Many providers who offer this type of insurance also offer premium rate. This means that you are able to take out premiums that remain fixed the whole time you are paying for the policy. The actual premium you will be asked to pay will depend largely on your circumstances. Your age might play a factor in the rate for the premium however other factors will also be taken into account and play a big part. Your gender, medical history and occupation will be taken into account and if your job puts you at a bigger risk then the premium will be higher. Another big difference between the two types of insurance protection policies is the deferment period. In the case of this policy it is considerably longer.
Covering your income against a loss is essential whichever form of protection insurance you wish to take out. You would be able to continue meeting your essential outgoings and of course one of the most important is your mortgage. If you get behind on your mortgage then you are risking losing your home, as the lender can choose to start repossession proceedings. Just one missed repayment is enough to have the lender send you a letter and wanting to know when you are going to catch up on the arrears. If you do not know when you are able to go back to work you would not be able to make any arrangement to repay.
Of course you would also be able to continue to pay all your other essential outgoings such as loan, credit card repayments and also other bills that have to go out each month. Both income protection insurance and income payment protection are both valuable forms of cover which can save you additional stress and anxiety.
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