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Income Protection Benefits for Biz Owners

Most people believe that income protection plans are meant for people who are employed by organizations, however this is not entirely true since some insurers offer excellent income protection plans for business owners as well. These plans offer maximum benefits that include basic perks such as 75% compensation of the business owner’s total pre-tax income. This amount is the gross distributable annual income from the registered business.

Business owners who are interested in providing for their family even when they cannot work due to injury or illness are offered two premium payment options that are; levelled premiums and stepped premiums. In most cases, people who opt for long term contracts that have tenures of 15 years or more are encouraged to opted for levelled premiums, where as business owners who want to get short term benefit plans that have a tenure of 5-10 years are encouraged to purchase stepped premium plans. Stepped premium plans are ideal for young business owners who do not have a problem with paying higher premiums after a few months or years.

Based on the terms of the contract, there are 2 types of income protection plans for business owners. The first type of contract is known as the indemnity value contract which is offered for lower premiums. The second type of contract is known as the agreed value contract which is offered for higher premiums. Agreed value contracts are ideal for business owners who want to ensure that they get guaranteed payments every month that are pre decided at the time of purchasing the selected agreement contract. Indemnity contracts are ideal for business owners who want to pay a little lesser and do not mind getting limited benefits.


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Income protection is a crucial part of any comprehensive financial plan. If you’d like some help customising the correct policy for you, or want to know more about the income protection insurance benefits.