Once you have elected to protect your income through Income Protection Insurance there are a number of variables to consider. The right choice is dependant upon your personal circumstances.
An agreed value policy as the name suggests is where your income is assessed when applying for Income Protection Insurance and you are then covered for a set amount. The advantage of this is that you know what you are covered for no matter what happens regarding changes to your level of income. The downside is the policies are more expensive.
An indemnity policy on the other hand is where you prove your income at the time of making a claim. If you income has decreased you will receive a smaller benefit.
The general concensus is for self-employed or people with varied income agreed value policies are a better option. There is a school of thought that when you can get it you should always utilise an agreed value policy to provide certainty.
As with all thing financial planning related we recommend you seek advice to ascertain what is best for you. If you would like further information please contact us.
Disclaimer
The information on these pages is provided in good faith and is to the best of our knowledge accurate. We provide it without any warranty as to its correctness of statement or opinion or its suitability for any particular purpose. Any advice on this blog/website is of necessity general in nature and not specifically tailored to suit differing individual circumstances. For that, you must seek and we advise that you do seek financial advice from a licensed professional. Southern Advisory can accept no liability for any decisions that you may make based on the information on this blog/website
An agreed value policy as the name suggests is where your income is assessed when applying for Income Protection Insurance and you are then covered for a set amount. The advantage of this is that you know what you are covered for no matter what happens regarding changes to your level of income. The downside is the policies are more expensive.
An indemnity policy on the other hand is where you prove your income at the time of making a claim. If you income has decreased you will receive a smaller benefit.
The general concensus is for self-employed or people with varied income agreed value policies are a better option. There is a school of thought that when you can get it you should always utilise an agreed value policy to provide certainty.
As with all thing financial planning related we recommend you seek advice to ascertain what is best for you. If you would like further information please contact us.
Disclaimer
The information on these pages is provided in good faith and is to the best of our knowledge accurate. We provide it without any warranty as to its correctness of statement or opinion or its suitability for any particular purpose. Any advice on this blog/website is of necessity general in nature and not specifically tailored to suit differing individual circumstances. For that, you must seek and we advise that you do seek financial advice from a licensed professional. Southern Advisory can accept no liability for any decisions that you may make based on the information on this blog/website
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