Income protection insurance is a rarely requested, yet very important for working folks, insurance plan. Everyone can suffer illness that can be serious to the point of missing work. It could even lead to permanent or temporary disability. Some employers will offer sick pay though for a limited period. Sick pay cannot be indefinite and it is usually at a reduced rate. Harsh realities crop into families where only one breadwinner existed.

Income protection policy will guarantee you the same life as the one you had before the accident or illness. You will continue to enjoy income flow even in the event of illness that can force one to stop thus losing earning capacity. With this policy, you can receive up to three quarters of your previously earned income. These payouts are usually tax-free thus the provider will not allow you to benefit unfairly from this policy. In case you are deriving other benefits and incomes, the payouts might be even lower.

It is important for one to consider the cost involved with such plans, as is the case with other policies. The rates involved partly depend on the applied deferred period. Deferred period is the period between when the sick pay comes to hault and commencement of getting payouts.   Lower premiums can be enjoyed on longer deferred period. Other factors considered when pricing these plans include the general health state and the occupation of the policyholder.

Another way of reducing premiums on income protection NZ is by going for the lowest coverage. It is also important to shop around when looking for this policy.