Income protection insurance can help cover your income, if due to an injury or a illness you are unable to work.

Income protection insurance is worth considering for all working people. It can pay a proportion of your salary for a while if you’re temporarily unable to work because of sickness or injury.

The length of time you receive payments depends on the contract term; for example two years, five years, or up to age 60 or 65; it varies depending upon the amount of cover you are willing to pay for.

For a young single person with no dependents who doesn’t need to consider the costs that might affect their family should he or she die, income protection (IP) or critical illness insurance could be the most relevant type of life insurance. They are designed for when it’s more important to meet the costs of ‘living’ than ensuring family members receive a payout after your death.

How much do I need?

The amount of income protection insurance you need will be determined by the salary you want to insure. Generally income protection provides cover for about 75% of your salary in the event of illness or injury preventing you from working.

Many companies will also insure 75% of your gross income or salary package. This can add many thousands of extra dollars that you are entitled to at claim time. We can let you know these companies that offer you the greatest coverage per month.

You need to consider what the costs are of meeting a mortgage and other debts; providing for a spouse, children or other dependents; and maintaining your assets and investments. Remember the point of income protection insurance is to provide an income stream if you can no longer work.

Your income protection policy will keep the dollars coming in each month when you are unable to work.

What should I pay?

Income protection policies are supplied by many companies in Australia and we at Incomeprotection.com.au have a excellent range of options for you. Shop around and compare, or we can shop around for you and give you a range of options. The cost for an income protection policy will vary greatly, it pays to shop around or just let us complete the leg work for you and find the best policy for your needs.

Costs are based on -

• Your Age (premiums may increase or cover decrease as you get older).
• Male or Female.
• Do you have any pre-existing health conditions.
• Non smoker or smoker.
• Occupation (for example, a manual worker will pay different premiums to an office worker).
• The waiting period you choose for your policy.
• The length of time the insurance company will pay you if ill or injured, this can range for 2 years, 5 years or to age 65.
• A base style policy or the PLUS benefit policy.
• Prices vary depending on age and other factors, by contacting incomeprotection.com.au we will rush to you our report or discuss in person your needs.
• Tips and traps
• This isn’t an exhaustive list, so compare product disclosure statements and consider getting professional financial advice.
• When taking out a policy, ask these key questions: what’s covered; what’s not covered; how much will I be paid after a claim; and what will the insurance premiums cost now and later?
• Consider getting a policy with index-linked premiums and cover so you know the cover will keep up with inflation.
• Indemnity or Agreed Value cover.
• Consider a non-cancellable policy; otherwise companies may reassess your health or other factors on each renewal, possibly raising your premiums or refusing to continue cover.
• Offset clauses allow most insurers to reduce payouts if you have other income (for example, sick pay from your employer or Centrelink benefits). Check the relevant section of the policy for details.
• Check the waiting period (how long before you receive payment, often 30, 60 or 90 days) and the benefit period (for how long payments will be made — typically two years, 5 years or age 65.
• Some policies pay out if you’re unable to perform your normal occupation; others only pay if you can’t perform any occupation for which you’re suited by education, training or experience.

We at Incomeprotection.com.au Pty Ltd are there to assist you at any time with your new income protection policy or to review your existing income protection policy.

Call us today on FREECALL 1800 20 20 44 or complete the online enquiry form.