Prepare For The Unexpected: Navigating The Complexities Of Insurance

Income protection insurance is designed to help you with a specified income in the unlikely event that you're unable to run your business because of an injury or an illness. But taking out income protection insurance requires consideration to ensure you know exactly what is covered and what isn't. A business insurance broker can help you better compare between different policies, but it pays to have some knowledge of the options available on your own. Here are some considerations when taking out income protection for your business.

Understand The Basic Offerings Of An Income Protection Policy

It's important to remember that income protection works to supplement a percentage of your business income in certain circumstances. You should also ideally understand the basic offerings of the policy to avoid any confusion later. These may include waiting periods, benefit periods, pre-existing medical condition cover, disablement benefit, rehabilitation expenses, childcare benefits and much more. Compare between different income protection policies and choose the one that offers the most benefits for your particular business needs. For instance, if you need to take care of ongoing business expenses, make sure the income protection policy covers them.

Be Clear About The Waiting Period Requirements

Keep in mind that most income protection policies require you to wait for a certain amount of time before you start receiving benefit payouts once your claim is successful. This waiting period depends on multiple factors, including your existing savings and business running costs. There are different options provided by insurers but shorter waiting periods usually come with higher premiums to offset the risk of more claims. Be realistic with your waiting period based on how long you think your business can survive without receiving any income.

Understand How Much You Will Be Paid After You Make A Claim

Income protection insurance provides a monthly benefit payment of up to a certain percentage of your business income if it comes into effect because of an injury or illness. Your payout will either be dependent on your business income at the policy application time or at the claim time depending on the type of policy you have taken out. If you finalise an agreed value at the time of application, you may have to pay higher premiums. But the lock-in nature of this cover ensures you receive a set compensation to protect you from financial headaches later.  

With plenty on offer, you may want to work with a business insurance broker to finalise the right policy for your organisation.