Income protection cover provides you with a regular source of income should you be unable to work for a period due to sickness or injury. You may also be interested in life Insurance or trauma insurance.
What is it?
Income insurance is exactly that, it replaces your income if you can’t work due to sickness or injury.
It’s important because your income is what fuels your life today – and all of your plans for tomorrow.
What does it provide?
Protection cover pays you a monthly benefit – just like your salary – and generally covers up to 75% of your pre-tax salary.
It can help you
- cover your mortgage or rent payments
- continue to make your payments on your car
- take care of all your normal bills while you focus on getting better
What is it and Why do I need it?
Everybody insures their cars and their homes but our most valuable asset is our capacity to earn an income. For most of us, loss of income would have enormous impact on our way of life and every facet of our daily activities. It pays the insured a benefit of up to 75% of their usual income whilst they are unable to work due to illness or injury, and benefits can be paid all the way to age 65. Imagine if you suffered an injury which rendered you unable to work for even six months, what effect would this have on your family? Do you have enough savings to continue to pay mortagage and car repayments for that amount of time and provide the basic necessities such as food and utilities? What if you were unable to return to work ever? Could you live on government benefits? Income Protection Insurance secures your way of life for the long term.
It is especially beneficial for self employed individuals, small business operators and professionals whose business depends on their ability to work for the business to continue trading.
What are Waiting Periods?
The waiting period is the amount of time you must be off work before you are able to make a claim. Shorter waits attract larger premiums and longer waits are cheaper. You need to take into account your personal cisrcumstances such as accrued leave and personal savings that you can rely on for financial support during the initial waiting period.
Agreed vs Indemnity
An agreed value is more expensive however the payment amount does not change, even if your income does. Indemnity policies require the insured to verify their income at the time of making a claim.
Income Protection Cover can be purchased with an ‘Own Occupation’, ‘Any Occupation’ or ‘Activities of Daily Living’ definition.
Own Occupation: the policy holder is incapacitated and unable to perform their own usual occupation.
Any Occupation: the policy holder is unable to perform any occupation which they are suitably qualified for. This is the more costly definition.
Activities of Daily Living: the policy holder is incapacitated and cannot perform a number of functions of daily life, such as bathing, eating, and dressing themselves.
Premiums are also tax deductible and can be funded through superannuation and at Herlife we believe that Salary and wage protection cover is one of the most worth while and most commonly claimed-upon types of insurance.
Contact our friendly team today to obtain a quote or find out more.