Income Protection Insurance

Written by Patricia Tunstall
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Income protection insurance is one of the most important types of coverage you can obtain. Your ability to earn an income is one of your most valuable assets. Imagine the dire consequences should you be temporarily or permanently unable to work and earn money.

Disability insurance replaces a percentage of your lost wages. How much is determined by your specific policy; this is why it is crucial to understand all the terms and definitions in your preferred disability plan before you actually sign up. There is "total disability" and "partial disability"--and more!

What Is "Disability"?

Any disability insurance provider has several definitions of "disability" and several matching policies. There is total and permanent disability; total disability, not permanent, that keeps you from working at any job; total disability, not permanent, that could prevent you from working in your career, but not in another occupation. There are even more definitions, which is not surprising, given the many possibilities for different circumstances in people's lives.

Total disability can be followed by partial disability, and vice versa. An employee could have short-term disability that is partial or total, or that progresses into long-term disability. Also possible is total recovery without full financial recovery. If this seems overwhelming, consider the services of a disability insurance agent who can explain the ramifications of each category. These may seem like technicalities, but they determine your level of income protection insurance, and they directly affect the future welfare of you and your loved ones.

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