What's your most important asset?
Most people think it's their house when it's actually it's their ability to work. Everyone insures their home but often overlook protecting their income.
Did you know that based on an income of $90,000pa you would earn just under $2.1M over 20 years (assuming 1.5% increase each year)? How would you, or your family, pay ongoing living expenses if you’re struck down by injury or serious illness? Even if you are eligible to receive the disability support pension you will only get between $16,000 and $22,000 a year. Is that enough to pay the mortgage, bills, school fees?
Income Protection is designed to replace up to 75% of your income if you suffer serious injury or illness that stops you from working and will continue paying you until you are able to return to work or for the entire benefit period, from 2 years up to you turn age 65
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Most policies are customisable to suit your specific situation, for example, waiting periods can be adjusted to take into account savings and sick leave entitlements plus premiums are tax deductible when held directly or it can be paid by your super fund depending on your cashflow requirements.
It also is specific to your job, take a nurse for example who hurts his or her back and is unable to return to work for 2 years. They can concentrate on rehabilitation and getting back to the job they love without worrying about how they are going cover daily expenses when sick leave runs out.
Income Protection is particularly important for the self employed or small business owners who do not usually have the luxury of sick leave or workers compensation and may have employees who are reliant on them and the job they will lose if the business fails.
Statistics gathered by APRA and ASIC show that the highest number of claims are due to musculoskeletal conditions (ie back pain), mental health disorders, cancers and accidents/injuries.
For the 12 month period to 31 December 2018 95.1% of all Income Protection insurance claims were accepted with the average time for them to be accepted being 1.6 months.
ASIC also found that direct life insurance had a lower claims payout ratio than fully underwritten policies taken out through advisers/brokers so contact us now for a free consultation to discuss your needs.
