At a glance:
- Why should small business owners consider income protection insurance
- Factors to consider when buying income protection insurance as a small business owner
If they ever find themselves out of work, small business owners should consider income protection insurance as a way of guaranteeing their income. Income protection is an insurance policy that provides them with a regular income until they can return to work. It is designed to protect them and their business, ensuring that they have a financial safety net in the event of an unfortunate occurrence.
Additionally, income protection insurance can provide peace of mind and reduce financial stress during an already difficult time. Often, small business owners are the main source of income for their families and may have a significant amount of debt, such as business loans or personal mortgages. Income protection insurance can help alleviate some of this financial burden, allowing small business owners to focus on their recovery.
Factors to consider when buying income protection insurance as a small business owner
Policy exclusions:
When choosing income protection insurance, small business owners should be aware of the policy exclusions. This refers to the conditions and circumstances that are not covered by the policy. As a case in point, some policies may exclude pre-existing health conditions or mental health issues.
It is important to read the fine print and \ understand what is not covered by your policy before making a purchase. At the same time, some insurers may require that you have had no prior claims within a certain period before applying for cover.
Cost of Premiums:
When buying income protection insurance as a small business owner, the cost of premiums is an important factor to consider. Premiums will vary depending on the type of coverage and policy terms such as benefit period, waiting period, and insurer reputation.
Waiting Periods:
Waiting periods are the length of time after an illness or injury before an income protection insurance policy begins to pay out. The most common waiting periods are 14, 30, 60, or 90 days. Depending on the policy, the waiting period could be shorter or longer. It is important to consider the length of time you will be without income when deciding on a policy, as it can have a significant impact on the cost of premiums.
Benefit period:
Income protection is an insurance policy that makes sure you get a regular income until you are able to return to work. You could be off work for two weeks or two years, but this insurance protects you as long as necessary. It is important to check the benefit period of your policy so that you can be sure that it covers the maximum amount of time you could be away from work.
Insurer reputation:
Small business owners need to consider the reputation of the insurer when choosing an income protection insurance policy. The insurer should have a good track record in terms of payouts, customer service, and claims processing. An insurer with a long history of providing reliable coverage and competitive prices is more likely to provide the coverage that small business owners need.
