There is a growing belief in philosophical studies that the universe is not an orderly universe, but is fraught with randomness and unpredictable chances. We will never be perfectly sure, therefore, of what will happen even if we have already measured out our every action and calculated our every move in life. There is always that element of chance and we have to accept this reality in whatever undertaking we engage in. This element of chance is more pronounced in the case of our finances wherein we can never really control the worldwide trends in business because they are beyond our own circle of influence. The only thing we can do to mitigate the element of chance in our life is by minimizing the risks involved in our life. We can definitely do this by availing of insurance which is a good form of risk management. Insurance can surely help us hedge against any uncertain loss or contingency risk. There are many types of insurance, but one of the best types of insurance that can help us lessen the risk of any contingency is the Income Protection Insurance or what we simply call IPI.
This form of insurance is available mainly in Australia, South Africa, United Kingdom, and New Zealand. The IPI readily pays benefits to insurance or policyholders who experienced incapacitation or inability to work because of illness or accident. Sometimes, we never really know what is in store for us, and in life a person is often like a leaf that is tossed and wafted along the risky waves of life. Accidents and loss of job may befall us. Hence, there is a need to mitigate the impact of these happenings by taking advantage of IPI. The income protection insurance Australia, for example, is quite popular among the citizens of Australia because of the advantages associated with this policy. I guess Australians are really quite particular with risk management, and are a bit pragmatic with the regards to the way they handle their life. For this reason, there are many Australians who are availing themselves of IPI to make sure that in case of incapacitation and inability to work because of accident and illness, their finances will not really suffer a major blow. To make sure that you understand what IPI really entails, it would be good to know the connotations of some of the terms involved in this insurance policy.
- One of the terms that are usually used in IPI is the term “incapacity.” A person is considered incapacitated if one is unable to do one’s occupation because of accidents or illnesses, and the said person is not involved in another job. Likewise, incapacitation also entails inability to perform one’s work which is suitable to the person right after an illness or accident.
- Another term that you need to understand is “benefit limits” which refer to the percentage of the normal earnings of a policyholder which is usually around 70% of the gross earnings of the policyholder. Benefits are usually paid on a regular basis which may be weekly or monthly. Likewise these benefits are tax free.
- Lastly, you should also understand what “premium” is. The premium is the specified amount required from policyholder for the coverage of IPI.