The insurance which protects your income is called income protection insurance. As with the changing environment, the risk of getting sick is increasing. Therefore, it’s always better to prepare in advance for any mishap which might take you to suffer with severe financial problems.
Income protection insurance not only protects you against sickness but also protects against accident which might make you handicapped for life time. These insurance policies prove to be boon in this situation, since the insurance is long-term in nature. You can take the benefits of these insurance policies till your retirement if you do not get able to return to work, means till the age of 65 years.
Before buying income protection insurance in Australia, it is always necessary to calculate the cost of the thing to ensure that is it coming under your budget or not. One should also make an idea that will it be worth buying or not. Same thing implies on the cost of income protection insurance policy which you are intending to buy.
You must make an idea that how much it’s going to cost you and also how can you lower the price of your insurance policy. To do this you must know about the factors affecting the cost of the policy. Here are some factors which affect the cost of policy and you can easily calculate that how much your income protection insurance plan is going to cost you.
How does your occupation affect the cost?
Your occupation has direct relation with the cost. If your occupation is related with manual work, the cost of insurance will be high. It is because, if the person have to work with heavy instruments and hazardous objects, he or she is likely to get ill soon. On the other hand people who do not have to do much manual work like clerk or manager can take the benefit of cheaper income protection insurance.
How does annual income affect the cost?
It is very clear to estimate that more the annual income, costlier the income protection insurance will be which can be taken by the consumer. However, the cost of product depends on the policy chosen by the consumer.
How does deferred period affect the cost?
Deferred period is the period between you stop earning because of your sickness or accident and the day you start getting money through insurance company. Longer the deferred period, lower will be the cost of the income protection insurance and vice versa. Therefore, you should also calculate your savings to estimate that for how long your savings can bear your expenditures.
How does age affect the cost?
More the age of the consumer, costlier will be the income protection insurance for him. It is because as the people grow old the risk of getting sick increases. Therefore, young people can take the benefit here.
How does sex affect the cost?
When it comes to income protection insurance policies females are subjected to get costlier insurance policy than males. All these cost affecting factors will help you to calculate income protection insurance cost easily.
Summary : You must know about the factors affecting the cost of the policy. Here are some factors which affect the cost of policy and you can easily calculate that how much your income protection insurance plan is going to cost you.
Income Protection 