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Income protection and retirement annuities are two totally different types of policies, even though both of them provision you with an income when you are no longer working. The biggest difference between the two is the fact that the one covers you for an emergency situation where you are asked to leave your company due to retrenchments and cut back, while the other simply waits until you reach retirement age so you can sit back and enjoy your retirement with peace of mind, knowing that you can continue your life well into old age and not have to worry about paying for everything still. The whole idea behind insurance is so that you can pay a small monthly fee now, for whenever you might need the cover at some point in the future. You essentially sacrifice a small portion of your income now so that you have a full portion paid out to you when you need it and there is no work available to earn it. Looking for these policies is fairly easy because there are loads of insurance companies out there that are willing to offer you cover. Priceline Protects is a great example of an Australian insurer that offer a wide range of products that are suited for exactly this. You may need to vary your search a little for your own country but at least this site will give you a decent benchmark to work with. You should be able to choose from a variety of options and the insurer should be plainly open and honest with you about everything. That way there are no surprises waiting around the corner for you, once you have your policy in place. Income protection is often a short term thing that really only happens when you get retrenched or your company goes under and you are not responsible for the loss of your job. When that happens, the policy kicks in and you receive a portion amount from your salary, usually up to 75% and no more, paid to your bank account for a set time frame, known as an indemnity period. Retirement annuities are a regular monthly contribution made towards a retirement savings plan that earns compounded interest. By the time you hit retirement age, the policy will be ready to pay out and you can either have a lump sum paid out to settle your debts and fix your cash flow, or you could receive it monthly like a regular salary, except you can sit back and do as little as possible to earn it.
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