INCOME PROTECTION INSURANCE BENEFITS
Income Protection Insurance (IPI) formerly known as Permanent Health Insurance(PHI) is mainly available in the United Kingdom, South Africa, New Zealand and Australia and covers for income protection policy holders who are incapacitated and unable to perform work duties due to accident or illness. However, free-Limit allows for holidays and temporary residences outside defined areas of the policy.
Normally, many life insurance companies will offer to pay a reduced benefit if policy holder takes a part time lob or lower paid job after health recovery. This is known as the proportionate benefit
There are four bases to incapacity related to illness related to this Income Protection Policy Own-occupation where policy holder is unable to perform his/her own occupation
2.Suited-occupation where policy holder is unable to perform an occupation related to his her education and training.
3.Any-occupation where policy holder is unable to perform any occupation at all.
4.ACTIVITIES OF DAILY LIV ING-(ADLs) if the policy holder is unable to perform some normal defined functions such as eating, walking, dressing, undressing ,washing, writing, climbing stairs, cooking etc. The policy will highlight a number of functions and their definitions.
The benefits to Income Protection Insurance varies compared to personal accident and
sickness(PAS),accident, sickness and unemployment insurance
THE BENEFITS OF INCOME PROTECTION POLICY INCLUDE:
1. Benefits are payable after incapacitation and after deferred period(This is the time between a varied claim and commencement of varied payment) has passed.
2. Insurance company cannot refuse to renew the policy or cancel it provided the policy holder continues to pay the premiums diligently.
3. Benefits are not liable to tax and are paid regularly e.g. monthly or after every fortnight.
4.Waiver of premium may be provided where premiums of Income Protection Insurance are not required while the income protection insurance policy holder received benefits from the policy. The policy cover continues as normal.