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If there is one thing that all United Kingdom residents should have, it is income protection insurance or IPI. Income protection insurance is a type of insurance policy that not only is available to residents living in the United Kingdom, but also to residents living in Ireland as well. What income protection insurance does is once purchased, protects the policy holder should he or she become unable to work by paying him or her benefits. Before this life insurance policy was known as income insurance protection, it was known as PHI or permanent health insurance.

There are four different ways that insurance companies define incapacitated; they are if the person cannot work their own occupation, if they cannot work an occupation because of their education or training, if they cannot work an occupation at all or if they cannot perform their daily activities such as eating, shopping, cooking, dressing, undressing and so on. If a policy holder is incapacitated due to any one of the four reasons previously mentioned, then he or she can make a claim to the insurance company, who will then determine whether or not the individual making the claim is eligible for benefits.

Purchasing income protection insurance would not be a bad idea considering all of the advantages that are associated with it. Once the policy has been purchased, should the policy holder become incapacitated for a valid reason, he or she will begin receiving benefits immediately after the claim has been approved. The benefits will continue until the policy holder dies from the incapacitation, until the policy holder has completely recovered from the incapacitation or until he or she eventually retires. The benefits that a policy holder receives are tax free and administered every week or every month regularly. Sometimes, policy holders can receive a waiver of premium which allows the policy holder to not have to pay the premiums while he or she is receiving the benefits but still continue to get the same coverage.

There are a few restrictions however, that are associated with income protection insurance policies. Benefits cannot be obtained for any incapacitation that is not caused directly from accident or illness. The deferred period (which is the time it takes for a claim to be approved) can be quite long, usually taking at least four weeks, sometimes even longer. The plus side to that is that as the deferred period gets longer, the policy holder’s premium decreases along with it. If the job currently being worked is switched to another occupation, the policy may become invalid or the premiums may be increased or decreased based on the new risk.

People tend to look at income insurance protection after a remortgage or loan, payments will vary depending on your job. the higher the risk of injury, the higher the premium.