Life insurance is designed to protect your loved ones if you pass away. The pay-out from a life insurance can help your family pay off a loan or debt, cover the cost of a funeral, or simply help them support themselves and cover their living costs when you’re gone. Life insurance works by paying out a lump sum to your loved ones if the policyholder passes away during the policy’s term. This protection will stay in place until an agreed end date as long as you keep up with your monthly payments
Income protection refers to a family of insurance products which ensure you can continue to meet your financial commitments if you are forced to take an extended break from work. If you can’t work because you’ve had an accident, fallen sick, or lost your job through no fault of your own, income protection insurance pays you an agreed portion of your salary each month. You can then use the money to cover debt repayment, bills and other costs.
Income protection only covers events beyond your control: you’re much less likely to be covered if you’re fired from your job or if you injure yourself deliberately.
