The question is never far from our minds: if you suffer an injury or illness that removes or reduces your ability to work for longer than your sick leave provides cover, how will you afford to live? It’s something we all dread.
Income protection insurance can provide you up to 75% of your usual salary as a monthly payment, so you can keep making loan repayments and keep the household running. At Pride Advice we want to make sure you are protected.
When should I get income protection insurance?
The younger the better. As soon as you have an income and a lifestyle you want to be able to maintain, even if you suffer an accident or illness that renders you unable to work or unable to pay the mortgage, rent, bills or other commitments.
What are the chances I’ll need income protection?
There is a high likelihood that you’ll benefit from income protection insurance. 60% of Australians will, at some stage, need to take a prolonged break from work as a result of illness or injury.
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Wouldn’t I be covered by workers compensation?
Workers compensation insurance, such as WorkCover, typically applies to only work-related conditions and injuries. As such, it may not cover you for additional household expenses such as a mortgage, household bills and childcare. It may vary according to each state’s legislation.
It’s also important to note that income protection insurance can potentially supplement your income if you’re injured at work. Once workers compensation ceases, your income protection insurance can kick in.
Also, it can cover you for injuries that are suffered outside of the work environment, which is extremely common – up to 75% of injuries occur when a person is ‘off the clock’ and at home.
Isn’t income protection insurance included in my super?
It could be, but you need to check and make sure it caters to your individual needs. Default income protection included with super can be very restrictive regarding the amount of cover, when it commences, how long it lasts and the definitions of accidents and illnesses for which cover is provided.
Are premiums tax deductable?
Some aspects of income protection premiums can be personally tax deductible, but this does depend on how they are structured. This is one reason why it’s important to seek advice around your income protection.