Income Protection

The most important asset we have is our ongoing ability to work, this is what pays the mortgage, bills, school fees, other financial commitments and funds our lifestyle. Just think for a moment how much you depend on your income and what would happen if you had an unexpected injury or illness and could not work for 12 months or longer. How would you cope?

The Facts

  • 36% of all financial hardship cases are the result of injury or illness and are the main reasons for home foreclosures in Australia (source: Gemworth Financial 2013)
  • In 2012, there we 40,215 claims for Income Protection in Australia with payments made by insurance companies to private policy holders of $1,163,027,498 (billion.) This figure does not include payments made by superannuation funds which makes these statistics even more compelling. The leading causes of claims in 2012 were; Cancer, Mental Illness and Musculoskeletal (source: The Risk Store, 2012)
  • Bank home loans are for 30 years yet most people who have Income Protection insurance in place are only covered for 2 years! How will they and their family cope financially if they are away from work for more than 2 years?
  • It takes a lifetime to accumulate your assets yet they could all disappear if your income stops for an extended period. Think of the medical costs, hospital bills, ongoing financial commitments – how will you cope?
  • Many people are under the false impression that they are protected by WorkCover, this is not the case when you consider that most accidents and illnesses happen outside the workplace.

The Reality & The Risks

While most people insure their home, car and possessions, it is even more critical to insure your income and make sure your family and lifestyle are protected from financial misfortune.

Losing your future earning power can be financially devastating. Without a regular income, it can be a challenge just paying for everyday household expenses like groceries and power bills while ongoing mortgage repayments or school fees can quickly eat away any savings. Worse still, if you’re self-employed and can’t work because of long term illness or injury, you could be faced with the added pressure of the business bills rolling in which may put the future of your business in jeopardy.

The Peace Of Mind Solution – Income Protection Insurance

The good news is that we can arrange an Income Protection policy to protect you against loss of income through disablement, serious illness and injury. Income Protection insurance will give you and your family peace of mind that your assets, financial commitments and lifestyle is protected.

Why Seeking Professional Advice is Important

While car and home insurance are relatively straightforward, Income Protection insurance has many different options and levels of cover to choose from. We can help you decide which cover is right for you and what issues you need to consider including the correct policy definitions for your occupation which is extremely important at claim time.

Income Protection is an extremely flexible policy, you can choose:

  • Waiting Period – the waiting period specifies how long you must be away from work due to injury or illness before the monthly insurance benefits commence being paid to you, options include;14 days,1,2,6,12 or 24 months. The policy can be tailored to cover you once any accumulated sick and long service leave are used.
  • Benefit Period – the benefit period specifies how long the policy will keep paying you if you are unable to work due to injury or illness. Once again this can be tailored to your needs with options including; 2 and 5 year benefit or to a specific age, 55, 60, 65 or 70.
  • Cost – the cost varies significantly based upon the waiting period, benefit period, amount of income insured and the insured occupation.
  • Tax Deduction – importantly, the cost of income protection is generally tax deductable if the policy is taken as a stand-alone policy outside superannuation.
  • Monthly Benefit – Income Protection insurance will pay you a monthly income when you are unable to work due to an illness or injury. You are able to insure your gross income by up to 75% and you may choose a benefit payment period from 2 years till age 70.

There are many Income Protection policies on the market today with varied conditions, options and benefits available. We will advise you on the best policy, structure, type and levels of cover based on your individual needs.

Make an Appointment

Please contact our office for an Income Protection quote or alternatively we can arrange for a confidential discussion. Select Advice Financial Planning has access to over 16 major insurance companies to choose from. We will find what is best for you.