Risks and Consequences
Disability insurance for self employed contractors provides important protection of income and lifestyle in circumstances where the insured is unable to work as a consequence of either sickness or accident.
Income Protection Insurance
The purpose of Income Protection Insurance is to provide a replacement regular income if you are unable to work due to an accident or ill health.
In the absence of income protection insurance you may be risking losing your home, car and other key elements that contribute to your basic standard of living. Depending on the level of cover purchased, the replacement income is intended to allow you to maintain at least the minimum lifestyle to which you and your family have become accustomed.
The cost of disability insurance will vary depending on a number of factors including:
- The length of the deferred period selected from the date on which you are first incapacitated to the date of the first payment under the policy
- The level of replacement income selected
- The duration of the period for which a replacement income is to be available - for example this may be 12, 18 or 24 months
A successful claim is likely to be contingent upon proof of loss of earnings and the claimant being able to satisfy a number of specified conditions. The conditions might include for example an inability to carry out a number of basic activities that are integral to daily living such as washing and dressing.
Payments under an income protection policy are typically made monthly.
Disability insurance is commonly referred to as Personal Accident Insurance, Sickness Insurance or Permanent Health Insurance.
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