Income Protection Health Insurance

Income protection health insurance is very similar to disability insurance, and the two may be sold under interchangeable names. Income protection insurance exists to make sure that you are able to receive your accustomed pay even if you are unable to work because of illness, injury, or other conditions. Scroll down to learn more about income protection health insurance.

Free Insurance Comparison

 Secured with SHA-256 Encryption

Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

Full Bio →

Written by

Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

Full Bio →

Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Nov 22, 2020

Advertiser Disclosure

It’s all about you. We want to help you make the right coverage choices.

Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We are not affiliated with any one insurance company and cannot guarantee quotes from any single insurance company.

Our insurance industry partnerships don’t influence our content. Our opinions are our own. To compare quotes from many different insurance companies please enter your ZIP code above to use the free quote tool. The more quotes you compare, the more chances to save.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about insurance. Our goal is to be an objective, third-party resource for everything insurance related. We update our site regularly, and all content is reviewed by insurance experts.

Income protection insurance is very similar to disability insurance, and the two may be sold under interchangeable names. The basic idea of income protection insurance is to make sure that you are able to receive your accustomed pay even if you are unable to work because of illness, injury or other conditions.

Income Protection and Incapacity

If you are unable to work, you might qualify for income protection payments. Incapacity can be the inability to work in your own field, unable to work at all in any field, or unable to perform the activities of daily living. In other words, you might qualify for income protection if you cannot perform any job you are trained to work, or unable to take up a new occupation in any other job.

Activities for daily living mean the things that you would normally do, such as dressing and caring for yourself. This could include showering, cooking, or regular shopping, among many others.

Income Protection Limits

Most income protection policies have limits based on your accustomed income. Instead of receiving that amount, you will generally only receive a percentage of what your normal salary would be. When applying for income protection insurance, check the amount the policy pays and negotiate the terms of the policy or shop for a different carrier if the default percentage is not sufficient.

Deferment Period

Most income protection policies will have a delay between filing the claim and when the benefit payments begin. Choosing a longer deferment results in lower premiums on the policy, but it also means you will have to go without income for a longer period of time while waiting on the benefits to kick in.

Proportionate Benefits

If you are able to take on limited work, the amount of your income protection benefits may be reduced proportionately. The policy is not intended to give you an early retirement, only to maintain your home and associated bills during your period of unemployment. Since the benefits are based on your income, any part-time job you get will have an impact on the amount of benefits you are eligible for.

In other words, you still have the same percentage of your accustomed income, with the income protection plan only paying the difference between your part time job and what your regular employment would have paid.

Free Insurance Comparison

Compare quotes from the top insurance companies and save!

 Secured with SHA-256 Encryption