We hope to provide you with information showing you the difference between these two policies.
Income protection insurance provides income if you are unable to work due to an illness or accident. This is often referred to as sickness or disability insurance. Coverage pays out until you can return to work or until you retire, die, or reach the end of the policy term, whichever comes first.
Income protection insurance typically pays out between 60% and 85% of your income if you are unable to work. The policy covers most illnesses either in the short or long term (depending on the type of policy and its definition of incapacity) and can be claimed as often as necessary while the policy is in effect.
There is frequently an agreed-upon waiting (or “deferred”) period before payments begin. The most common waiting periods are four, thirteen, twenty-six, and twelve weeks. The monthly premium decreases with increasing delay.
Personal accident coverage, also known as personal injury insurance, is a policy that pays out compensation in the form of a lump sum if you suffer a severe injury or death in an accident.
Typically, accident insurance pays a cash benefit directly to you, which you can use to pay for anything you need such as groceries, medical bills, or even your mortgage. This means that if you are unable to work due to an injury, your family will still be able to pay for unanticipated out-of-pocket expenses.
Coverage | Personal Accident | Income Protection |
Income replacement | No | Yes |
Specific amount lump sum | Yes | Lost income |
Accidents | Yes | Yes |
Sickeness, illness, or accidents | No | Yes |
Waiting period | Yes | Yes |
Qualifying | No | Yes |
Accident insurance and income protection insurance can be a great, affordable way to supplement and cover the additional expenses that your health and disability insurance may not cover. These can also be a good income replacement should you become unable to work for a period of time.
Contact the experts at Leap Carpenter Kemps Insurance Agency. They have been in business for over seven decades and have licensed experts on hand to guide you on the best coverage for your organization. Call for a free quote today!