INCOME PROTECTION
Without active income protection insurance in Australia, you never know just how vulnerable you are. You don’t realise how indispensable your income is until it’s lost. Indeed, few people are aware of just how much they spend weekly – and how devastating it can be if you are no longer able to cover these costs.
INCOME PROTECTION

Understanding the Ins and Outs of Income Protection

While we all love and protect our house, car, and other important assets, we forget to protect that one asset that let us buy all these other assets – our income. If you’re unable to generate a steady income due to unforeseen circumstances, how will you repay your debt and sustain your lifestyle? Consider income protection as a safety net that will keep you protected when you’re temporarily unable to work. If you’re suffering from injury, illness, or disability, income protection will keep you covered. It regularly provides you with a part of your income until you can start working again. It gives you a partial income until you reach a specific age or for the duration mentioned in the policy – whichever comes first.

What will I get from Income Protection insurance?

You don’t realise how indispensable your income is until it’s lost. Indeed, few people are aware of just how much they spend weekly – and how devastating it can be if you are no longer able to cover these costs. Without active income protection insurance in Australia, you never know just how vulnerable you are.

The best income protection insurance works in several ways. Income Protection insurance can replace up to 75% of your income during periods where you are not able to work because of illness or injury. Superannuation contributions of up to 15% can also be covered. Ask for an income protection insurance quote today.

An Income Protection insurance case study

A 36 year old couple has two children in primary school and a $550,000 mortgage. The father works full time for $75,000 and the mother part time for $18,000. The father injures his back and must take 7 months off work. At the time of the accident, they have $7,000 in combined savings.

It is thanks to Income Protection that the family manages to stay afloat. The father receives $4,650 a month, allowing the family to continue to pay living expenses and meet their $2,900 monthly mortgage payment without depleting their savings or relying solely on the mother’s income, which is $1,500 per month before tax.

Get an income protection quote as soon as you can and take out the policy while you still have a job.


FAQ

How much does a private income insurance program pay for loss of normal income from a disability?

When you apply for a new policy you set your sum insured based on your income level. Generally, you can be covered for 75% of your salary. An income protection payment is paid monthly. For example, if you have a $100,000 wage. Your income protection policy will cover you for $75,000 per year. This will be paid to your monthly, so $6,250 per month will be your claim payment.

What is income protection?

Income protection differs from Life, TPD and Trauma in that it can pay you a percentage of your salary, generally 75%, in the event that you become sick or injured and are unable to work. For example, if you have a $5,000 per month income protection policy with a 30 day waiting period and a ‘to age 65 benefit period’. From the day you get injured, you need to wait 30 days, then from the 31st day onwards you will be paid $5,000 per month until you are able to get back to work. If you go on an income protection claim at age 35 you could potnetially be on a 30 year income protection claim all the way up until retirement age 65.

What does income protection insurance cover you for?

Generally speaking, income protection can cover 75% of your salary in the event that you become sick, injured and are unable to work.

What is income protection allowance?

Salary continuance / income allowance and income protection are often interchangable terms. There is no difference between them. Income protection is generally more comprehnsive than mortage protection or payment protection (PPI). Give us a call if you would like to discuss some of the key differences.

How much is income protection per month?

The premiums for income protection vary on a number of different factors. The main ones from a personal point of view are age, occupation and even gender. On the policy side, you can alter your sum insured, waiting period or benefit period to alter your premium. For example, generally speaking the longer the waiting period the cheaper the premium.

 

GET THE RIGHT POLICY FOR YOUR NEEDS
Whilst a steady and reliable income is essential for your health and peace of mind, many people do not realise that they can count their source of income as another insurable asset. Whether you’re an employee or run a business, Wealth Smart can help you find the Income Protection insurance package that suits your unique life situation and keeps you and your family financially secure through all of life’s challenges.