Income protection or income replacement is one of the sub-branches of life insurance. In the event of a long-term illness, disability, or death, this coverage offers financial security. However, not many are aware about the importance of this policy. Let’s find out how income protection can save you and your loved ones.
Do You Need Income Protection?
Your monthly salary is one of the most valuable sources of money, especially if you support the family financially. To determine whether you need income protection, simply consider whether your loved ones would have enough money to survive or even live comfortably if you were to pass away or become paralyzed and unable to work.
Some people might be unaware of the financial advantages income protection can provide a family in the event of a loved one’s passing and the loss of a regular income source. Income protection is a great way to replace lost income and shield you and your dependents from both short-term and long-term financial difficulties.
An income protection or income replacement plan works to safeguard and replace participants’ income in the event of one of the following:
- Total Permanent Disability (TPD);
- Critical illness.
Consequently, you could be thinking that you ought to purchase this policy as soon as possible. Here are four ways how income protection can protect you:
Manage Your Debt
Your debts and other bills won’t magically disappear if you get sick. In fact, your debts may get higher because of your expensive recovery treatment expenses. Income protection can ease the pressure of managing those bills. So, you don’t have to worry too much about how to settle off your debts and bills.
Focus On Your Recovery
When you are recovering from an illness or injury, financial stress is not a pleasant companion. In fact, any kind of stress is bad for your recovery. Wouldn’t it be great if your only concern was regaining your health?
Maintain Your Life Quality
Depending on the extent of your illness, the change of lifestyle and routine may be inevitable. However, a small financial setback can help you feel better about your circumstances.
Reassurance to Your Family
Your medical costs could rise if you are unable to work. You’ll be able to write off some of those costs if you have the appropriate income protection policy in place. With an income replacement policy, you can have “peace of mind” knowning that your family will be fine.
How Much Does Income Protection Insurance Cost?
In general, the cost of income protection will vary from company to company. Some of the elements that influence the cost of its insurance premiums are:
- Amount of coverage;
- Medical history;
If you have income replacement, you will receive a cash payment for each day that you are hospitalised as a result of an accident, making up for any potential income loss. The average insurance premium for income protection is listed below:
|Coverage Scheme||Monthly Premium|
|Yourself and spouse||RM29-RM135|
|Yourself, spouse and children||RM32-RM180|
As you can see, this policy provides you and your family a complete protection with affordable premiums. Once you pay for the premium, you can file claims for:
- Accidental Death;
- Medical out-patient expenses;
- Compassionate cash;
- Children’s education benefits.
When Is the Best Time to Get Income Protection in Malaysia?
Take a look at your family’s budget expenses such as the mortgage, car loan, utilities, groceries, taxes, internet bills, retirement savings and petrol. As time passes, these expenses will continue to rise.
This means that you are strongly advised to seek income protection if you are the family’s sole or one of the family’s two breadwinners. Bear in mind, anything could happen to you such as risk of stroke, cancer, accidents and many more. While this unpleasant to consider, you cannot shy away from the possibility. Consider getting income replacement if you are:
- An adult between the ages of 18 and 65 and a child between the ages of 45 days and 18 years (or younger than 23 if enrolled full-time in an accredited higher education institution);
- A Malaysian citizen or a Malaysian permanent resident;
- An individual who is legally employed and resides in Malaysia, including spouse and children.
Hopefully the tips and importance of income protection shared above can help you make the best decisions for yourself and your loved ones. If you want to get the best health insurance, visit the Qoala website for more info. Qoala provides a range of medical insurance products from some of the best and most popular insurance companies in Malaysia with a simple, fast and safe process.