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Income Protection For Self-Employed

Most people are under the impression that income protection insurance is offered only to people who work for an employer, however the truth is that income protection plans are also offered to self employed individuals. Small business owners, traders and other self employed individuals can insure up to 75% of their annual income and also avail of additional benefits such as a death benefit or a day one claim benefit.

Self employed individuals that opt for this type of insurance are usually given various options to customize the selected plan. The policy holder can not only select the type of premium he wants, but he can also select the waiting period and the benefit period. The waiting period and the benefit period selected has a direct effect on the cost of the policy however by selecting a shorter waiting period, the policy holder can star enjoying the benefits of the policy as soon as possible.

The two types of premiums offered to self employed individuals are stepped premiums and levelled premiums. Since each type of premium plan has its own benefits the buyer should keep his own requirements in mind before opting for a premium plan. Buyers who want to take plans for 10 years or lesser can benefit by opting for stepped premiums and buyers who want to take plans for 15 years or more can benefit by opting for levelled premiums.

Many people who do not opt for this type of insurance often feel that income protection plans are too expensive. Although these plans can cost up to 3% of the policy holder’s annual income, they definitely protect him when he falls ill and cannot work, hence these plans often pay for themselves. Since income insurance plans are tax deductible, self employed individuals can save on tax by opting for the right cover.

According to a 2006 survey, less than half of the self employed individuals in Australia felt that they had adequate cover. If you feel that you do not have adequate cover then you should consider getting an income protection plan as soon as possible since these plans will protect you are your business when you cannot work due to illness or injury. Remember, by comparing quotes of protection plans you can not only save money but you can also get maximum benefits. There are many websites that allow buyers to compare features, cost and perks of income protection plans online and these websites usually do not charge any fees for their services.

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