Income protection insurance is a great option for people that are working and are looking to save money as well as get some insurance cover. Income protection works like regular insurance and it insures you against the loss of income. It works the following way. A person earns income by either working for a person or running a business. If for some reason this person cannot continue working or running their business due to disability or illness (anything short of death), then the insurance company pays them a monthly income. The amount of the monthly pay depends on a number of factors like age till retirement, premium amount able to pay, etc.

This type of insurance plan is also called disability pay by some. Income insurance was started in the United Kingdom and Ireland it is still one of the principal regions in which this insurance is sold. It is also available in other countries, though it is sold under different titles. The great thing about this insurance is that unlike other forms of insurance the premium is not lost if an event does not occur. The accumulated amount is invested and paid back in the form of a monthly stipend. So you are not only protecting yourself but are also investing in a savings plan.

Many people are put off by the high premiums and the long term of the plan. But they do not realize that they can move the money that they are putting away as savings can be invested in this plan.

There are 4 circumstances under which these benefits can be paid. These are:

1. Payment in case of accident. 
2. Payment in case of short term disability. 
3. Payment in case of long term disability. 
4. Payment after maturity of plan.

The amount paid is 75% of the person’s salary on the 1st of July of the previous year. Before you sign on for any plan please make sure you know what you are signing on for. There are many people that are disappointed later because they did not get the whole picture. So please read the fine print as well. This may be tedious but it will tell you the conditions the policy is under and you will have to abide by.