What is salary protection insurance?
One of the most important matters to take care of now, so your family doesn't suffer needlessly in the future, is to make sure you have sufficient salary protection insurance. By doing this you can ensure you have the following protection:
- A benefit of 75% of your monthly salary
- Cover which extends to accidents, major traumas and illnesses
- Payments which start after a stipulated waiting period and continue until you can return to your usual employment again
- If you are unable to resume work, you will need payments which can continue until you reach 65 years of age (this usually depends on your occupation)
Protect yourself with salary insurance
Every family has debts that need to be paid, be is the rent or mortgage costs, car payments and running expenses, schooling costs, and of course food and clothing. These are just the basics. Now consider how you'd go about paying these debts of you were unable to work due to illness or injury. This is where salary continuance insurance can help.
Salary protection insurance can provide you and your family with an ongoing benefit to help you keen up with ongoing financial obligations.
How does salary protection insurance work?
Salary protection insurance pays you an ongoing monthly benefit (generally 75% of your monthly income) when you are unable to work due to illness or injury.Generally, the benefit period for salary continuance is capped at two years.
When can you make a claim?
If you need to make a claim on your salary protection insurance policy you will generally need to have been out of work for a period of time specified by your insurer, this is normally between 30 and 90 days.
What do you need to tell your insurer?
When making a claim, you will need to provide them with evidence of your illness or injury. Give them a call to find out exactly what evidence they will require to make sure the claims process runs smoothly.
Once your insurer has all of the information they require, your claim will be assessed and if successful, you will continue to be provided with a benefit until you're healthy enough to return to work or your cover period expires, whichever comes first.
Who needs salary protection insurance?
If you're single with no dependent children, salary protection cover might make more sense than a life insurance policy. In your case the biggest risk might be an incident occurring whereby your ability to continue earning a living could seriously affect your accepted standard of living. At this stage in your life you would not have to consider leaving funds behind should you die, to support dependants.
Whatever your personal situation there are two main types of salary protection insurance for you to consider:
- Agreed. This type of cover carries a higher premium but has a better payout and is more likely to represent your true earning capacity. It will not fluctuate as a salary might, as the payments to be received will have been agreed to when you took out the policy.
- Indemnity. With this cover you verify your income when making your claim and your benefits will be adjusted to suit. This can be problematic at times, especially if your salary tends to fluctuate because you work part time or if you happened to become unemployed before the incident occurred.