What is the difference between Income Protection Insurance, Mortgage protection and Lifestyle Protection?
Income Payment Protection as widely sold on the internet and elsewhere is not specifically linked to any mortgage or loan, it covers just a percentage of monthly income that can be used to pay those regular outgoings. Most income protection policies do not specify the actual expenses the benefit should be used for and can be considered as income replacement, replacing the salary that is lost through the inability to work. Income protection insurance policies are traditionally slightly more expensive than mortgage protection. Hybrid mortgage protection insurance polices are a fairly recent addition to the range of options where the mortgage can be covered with an addition percentage of the cover added to help towards other bills.
Keeping up with the bills if you lose your income
Mortgage protection insurance is the most popular in the range of payment protection insurance options generally available to consumers. But covering the mortgage alone does not help with other monthly outgoings, such as council tax, car expenses and utility bills. Catering for those other outgoings as well as the mortgage helps protect your way of life and can help prevent you from spiralling into debt in an effort to meet those outgoings that do not disappear with your job.
Don’t wait until you need Income Payment Protection – it may be too late
Many people do not think about the consequences of what will happen if they lost their income through accident, sickness or unemployment. The first time they think about it is when they are told of impending unemployment and by that time it is usually too late to get cover for that period of unemployment. All payment protection insurances contain unemployment exclusion periods and these can vary from 60 days (as with Monster Insurance) up to 150 days or even 180 days as offered elsewhere. This means that any claims made for unemployment within that period of days would most likely be excluded as will claims made where unemployment was impending at the time they joined the scheme. If consumers wait until they know they will need income protection insurance or a variation of payment protection, it will be too late, so if you think the cover is a good idea, don't wait.
Buying Income Payment Protection
You need to be sure that you are buying the right policy for your needs. Income Protection Insurance is widely available and if searching for this cover be aware that it is sometimes referred to as Income Payment Protection. This lifestyle protection insurance is slightly different from income protection in that with this policy you decide from a wide range of options which regular commitments you wish to include and in the event of a claim benefits can be made to cover those provable commitments.