There are actually dozens and dozens of various kinds of insurance ... and that is just insurance for ordinary citizens! Most of them seem quite much like each other, in the beginning inspection ... but out of the box the case with income protection insurance and long-term care insurance, providing them with confused might have quite a direct effect on your life. Today we glance at the differences between income protection insurance and long-term care insurance.
What's income protection insurance?
When you are taking out earnings protection policy:
The insured event is: An injury or illness that leaves you not able to work
The benefit is dependant on: A percentage of what you will have earned within the time you had been unable to work.
Conditions include: The injury or illness must occur while insured. There's also other important conditions, that are policy specific.
What's long-term care insurance?
When you are taking out a lasting care insurance plan:
The insured event is: You being injured or ill towards the extent that you'll require help with performing basic daily functions.
The benefit is dependant on: The cost of the long run care.
Conditions include: There isn't any age limit because there is with income protection insurance. Other important the weather is policy specific.
Long term care insurance coverage is mostly a US phenomenon, the ones often stumble upon it when looking for information about insurance on the web. In Australia, there's often a long-term care component included in other types of insurance plans. For example:
- Life insurance plans often have an overall total and Permanent Disability option inside them
- You can use your earnings protection insurance plan to pay for carer's costs (though benefits are just paid to age 65, and you ought to remember that you're only obtaining a maximum of 75% of the regular income)
- Trauma insurance plans may have 'loss of convenience of independent living' among their standard trauma events, or possess a Total and Permanent Disability option (defined because of your own occupation or any occupation)
Should I've both income protection and long-term care insurance?
The coverage for income protection and long-term care policies does overlap in certain ways. Should you made a claim in your income protection insurance plan, for example, you could utilize the 75% of the ordinary income to cover the costs of the carer.
However, since many people of working age have spouses, parents or children able to looking after them, they see little reason for getting long-term care insurance.
The dilemma of whether or not to insure, and potentially protect yourself from the disaster afterwards, or not to insure, and also have more cash free for enjoying your lifetime in the present, exists for each type of insurance. Most families examining whether or not to get income protection or long-term care insurance (or both), will discover that the cost/potential benefit ratio is higher for income protection compared to long term care.
Income protection insurance
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