What is the benefit cap for income protection insurance typically set at?

The benefit cap for income protection insurance is often set at a range of 50-75% of income less any other paid state benefits. This structure is designed to ensure that the benefit provides significant assistance without encouraging individuals to rely solely on insurance payouts for their income. By considering other state benefits that an individual may receive, such as disability or unemployment benefits, the insurance aims to maintain a balance that supports the insured without undue financial advantage. This percentage range allows individuals to receive adequate financial support while ensuring that they are still incentivized to return to work when possible.

This option recognizes the importance of integrating various sources of income protection, thereby creating a comprehensive safety net for individuals unable to work due to illness or injury. The design of income protection policies around this benefit cap reflects a broader understanding of financial needs and encourages responsible financial planning.