When you're looking for a way to protect your finances and your family from the unforeseen, there are several options. Many people get life insurance to pay off debt when they die, but they don't think about what a long term illness or a long term loss of income would do to them. It could ruin them financially, and the extra stress that would put on them wouldn't be good if they were battling a serious sickness. It could also make them depressed, and they might struggle to find another job.
Fortunately, there are ways to avoid these kinds of things. Two of them are accident sickness insurance (ASU) and income protection insurance. Both of these can cover you if something unexpected happens, but which one is better? That's something only you can decide based on your situation and needs – and you might find that you want them both. Accident sickness cover protects you if have a serious illness or if you're involved in a bad accident and can't work because of it. Income protection cover is designed to pay you what your income would have been for a set period of time if you lose your job for specific reasons (like accident or illness).
Some types of insurance pay a lump sum, though, and others pay a monthly amount – much like getting a paycheck. Which way is better is a matter of opinion. ASU might be a much better choice, especially for people who work in high-risk jobs or who have a genetic predisposition to certain types of debilitating illnesses. Income protection could be the best choice for other people, who aren't worried about accidents or getting sick. Instead, they might be worried about being downsized or laid off because there are a lot of economic issues.
Maybe their company isn't doing too well or there's too many of whatever job title they have at that company. These are all issues that are worth consideration when it comes to deciding what kind of insurance you want to get and what would be the most beneficial to you. An insurance agent can talk to you and help you make your choice, as well. Don't be afraid to ask questions about ASU and income protection insurance, and compare the two policies for benefits that you'd receive, how much you'd have to pay, and what kinds of circumstances wouldn't be covered. If there's too much of a risk with one type of policy, a different one might be better.
You could also consider getting both accident sickness cover and income protection cover, since they address two different areas. That way, you'd have money paid to you in the event of an accident or sickness, but you'd also have your income protection from the other policy. That could allow you to use the ASU policy to help pay for your care and the income protection policy to pay the bills, feed your family, and address basic needs. Between the two of them, they could make your financial life much easier in the event of a serious accident or illness.
The first thing that you should know about Income Protection Cover is that it does not provide redundancy cover. It is a long term policy that is concerned about health related work absence from work and has nothing to do with redundancy. In the event of such absence on health grounds, you would be eligible to receive a tax-free monthly income that would be payable to you until your desired retirement age.
The good thing about Income Protection Policies is that they can be claimed on multiple occasions, even if they are for the same illness or disability, and if you happen to return to work at a salary that is lower than your priori salary on account of incapacity, you would be eligible to claim a proportional amount of the policy. Income Protection Policies are not linked to mortgage payments.
Accident, Sickness and Unemployment (ASU) Policies, on the other hand, provide cover that is of a shorter term orientation than Income Protection Cover and therefore, can normally not be claimed for a period of more than 2 years. ASU Policies deal with redundancy of employed persons only, which means that the policy would come into effect in the event of your being made redundant from your occupation. ASU policies, unlike Income Protection Policies, can be linked directly to mortgage payments, loan payments or other bills and income. While Income Protection Policies are longer in duration and are stricter by nature, their chances of paying a claim are much higher than when compared with the claims of ASU cover. Further, Income Protection Policies offer proportional benefits while proportional benefits are not part of the ASU insurance package.
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