Over one million new business applications were filed in the second quarter of 2021. In fact, in the past year, more businesses have begun than all of 2019.
Seems absurd in the face of a pandemic, but it’s true. And with these new ventures comes new risks. Private income protection insurance is there to help new business owners, and self-employed folk alike mitigate that risk.
Unsure what income protection insurance is, or how many benefits? This article will cover all that and more.
What Is Income Protection Insurance?
Income protection insurance is an insurance plan that offers benefits to policyholders in the event of an injury or illness that prevents them from working.
Further, this insurance is designed to provide you some form of supplemental income while you are unable to work. This can be in the form of lump-sum payments to covering medical debts and more
Different Types of Income Protection Insurance
In fact, there are a number of different types of income protection insurance.
The most traditionally known is disability insurance. Disability insurance covers you in the event you’re unable to work. You are entitled to some short and long-term benefits.
The next two are more specific: long-term disability insurance and total permanent disability insurance.
Long-term benefits apply for both policies, while total permanent disability insurance provides benefits in the event you can not recover from an accident. Examples are losing eyesight, a limb, or attaining an incurable disease.
The Benefits of Income Protection Insurance
As with any insurance plan, the best part is that you know you and your family are provided for if an accident were to occur. This plan specifically benefits business owners or self-employed individuals in particular.
A lone business owner doesn’t have access to many government staples that large businesses have, such as worker’s compensation or sick leave. And in many cases, benefits end after a period of time off work in corporate America.
This is in many ways unemployment insurance for those that work for themselves.
Another big benefit is that plans are flexible and customizable. Meaning you can opt-in for short-term payouts, if eligible, which can cover outstanding debts or even covering your monthly rent.
Payouts often cover periods ranging from six months to two years, giving ample time for recovery.
If you’re concerned about being unable to work for a longer stint of time, there are longer options available. For example, there are plans that allow for coverage up to 65 years of age.
This means that if an incident occurred, you could be covered for years, if not decades, depending on the plan that you apply for.
Of course, with all insurance, pre-existing conditions will raise premiums. Meaning a 20-something with no current ailments will have a far lower premium than one in their late 50s with a heart condition.
Get Private Income Protection Insurance
As mentioned before, private income protection insurance is vital for those that are small business owners or are self-employed. Depending on your business, you may be at risk constantly.
Why put your finances and your family’s well-being at stake? Consider an insurance policy an investment, if something bad were to happen.
If you’re an entrepreneur or business owner, check out our related articles for more on succeeding in business in this post-COVID world.