What is Income Protection Insurance and why should I have it?

Have you thought about what would happen to you and your family if suddenly you found yourself unable to work?

Would you be able to support your family if you were injured or sick and needed to take several months off work? Income protection insurance, sometimes known as salary continuance, can help provide you with in income to manage your expenses if you are unable to work for a certain amount of time.

Unlike other life insurances that are paid as a lump-sum, Income Protection is a monthly benefit that pays you up to 75% of your income and covers you for accidents, illnesses or major traumas. It pays you up until you return to work (after your waiting period) or, if you can’t return, up until the benefit period. This can be up to age 65 depending on the policy and your occupation.

Income protection is tax deductible and is designed to ensure that you can continue to pay the mortgage, general household expenses and carry on financially until you are able to return to work.

It is an important part of an insurance portfolio for anyone who is the main income earner for their family or for anyone who relies on the income from their ability to work especially self-employed people or professionals.

Each income protection policy has its own definition of disability and range of benefits. Some important options you need to consider when choosing an income protection policy include:

  • Waiting period – this is the amount of time before you can make a claim.  It can be anywhere from 30 days to 2 years.
  • Benefit period – this is the length of time the income payments will be made. Generally the benefit period ranges from 2 years to age 65.

Lakeside can assist with personal life insurance to protect your income in the event of death, injury or illness.  To find out whether you have appropriate and accurate cover, why not schedule a meeting with Gerry or Clae now?

Information current as at 12 June 2015
The advice is general in nature only. Before acting you should consider the appropriateness of the information having regard to your personal objectives, financial situation and needs. You should read the relevant Product Disclosure Statement (PDS) and Policy Document before making any decision about a product.