The complexity of income protection plan presents a huge challenge when opting for cover. Considering income protection policies offer a wide range of structures and options that makeit easy for planners to balance the client’s needs with their affordability, there is no room for mistakes with your decision. You want to reap maximum benefits and this can only be possible if you choose the right plan.
But what if you’re getting anincome protection plan for the first time? Well, you can always make a well-informed decision provided you get help from professionals. Here are useful tips to employ when choosing the right income protection insurance plan in Singapore.
Benefit Period
Just in case you might not know, the benefit period simply refers to the maximum length of time that a claim will be paid. Benefit periods can either be expressed as a defined period or until a certain age. One thing you ought to keep in mind is that you’ll have to dig deeper into your pockets when paying the cover if the potential claim period is longer.
The main point of focus in this regard is how you can manage financially if at all you happen to be disabled long term. In the event that you’re rendered jobless, do you have enough capital working for you to replace your income to age? If not, then long-term income protection is the most viable option to settle on.
Indemnity Monthly Benefit or Agreed Value
An agreed value policy offers assurance that in case income fall, you can still receive the full monthly benefit if you are totally disabled. Things tend to be different with the indemnity monthly benefit as it generally pays the lesser of the monthly benefit and 75% of income in the last 12 months. Before settling on one, you need to factor in the stability of your income. This is mostly the case when it comes to the likelihood of incoming falling in the future.
In Conclusion
The income protection plan offers adequate insurance coverage together with regular pay-outs for a source of alternative and continued income in the event where you can no longer work. In this regard, you should never make a decision hastily as it might end up proving costly. Take time and do your homework to understand what it takes to choose the right income protection plan.
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