Many of us do not think twice about insuring our house, our cars and our travels. But, what about protecting our ability to work? After all, it’s our income that enables us to own a house, maintain a car and go on holidays.
Consider this: if you earned $50,000 a year for 40 years your income asset would be $2 million. You insure your car, and we’ll bet it isn’t worth $2m, so why not insure your income?
Are you sure you’ll be protected financially regardless of the situation?
Even if you’ve thought about the potential of illness and injury, are you sure your income and lifestyle will be protected? You may be eligible for some compensations and entitlements depending on your situation. But will these be enough? Will you qualify? And what are the waiting periods?
- WorkCover or Workers’ Compensation – covers workers for injuries only associated within the workplace and does not cover you for illnesses. However, serious accidents can also occur outside the workplace, leaving those without income insurance cover vulnerable.
- Sick leave – typically salaried employees are entitled to 12 days absence a year due to sickness or injury.
- Social Security – a disability support pension may be available from the government however should not be treated as a solution as social security benefits are assets and means tested.
- Private Health Insurance* – is limited to medical expenses, eg hospital stays, and does not extend to general living expenses such as groceries, utility bills and mortgage repayments.
That’s where income insurance can give you peace of mind that your family and lifestyle are protected while you recover if you are unable to work.
- Income Insurance – If you can’t work due to illness or injury, income insurance can provide you with a replacement income of up to 75% of your employment related earnings until you are able to return to work.
What are the benefits of Income Insurance?
This type of cover can be held within the superannuation umbrella so it does not affect your cash flow or can be held outside of super where you can claim a tax deduction.
Also, the versatility of income insurance means the payment you receive, should you make a claim, is yours to spend as you choose. **
It won’t happen to me
Having an illness or getting injured is not something we like to think about, however, the harsh reality is that it can happen to anyone. Research shows that illnesses and injuries don’t just affect the elderly.
- Cardiovascular disease affects one in six Australians.
- Everyday, over 65 families are impacted by an event that seriously affects their ability to earn an income.
- Stroke kills more women than breast cancer and more men than prostate cancer.
- In 2013-14 about 531,800 people experienced a work related injury or illness – around 39% received no financial assistance.
How much does Income Insurance cost?
Your income insurance premium will be based on your age, smoking status, gender, occupation, health and amount of cover you choose.
There are other variables that can affect the premium. For instance:
- A waiting period before the income is paid – the longer the waiting period the lower the premium.
- How long the income is paid for – the longer the benefit period the higher the premium.
Designed Wealth has arrangements with a wide range of insurance companies. This is to ensure that the product we recommend suits your circumstances.
Protect your income and your lifestyle!
Contact one of our experienced Financial Advisers today to discuss you circumstances:
Phone: 07 3841 1200
* Any advice that relates to “Private Health Insurance” is provided independently of our licensee AMP Financial Planning Pty Limited.
Thus, AMP Financial Planning Pty Limited won’t take any responsibility for any actions or services provided in this area.
** Your benefit amount will be assessable for tax.
 Heart Foundation. (2015). Information for professionals – Data and statistics
 Investment and Financial Association of Australia, and Lifewise. (2 March 2010). Media Release: First time ever figures.
 National Stroke Foundation. (2015). Tools and resources: Facts and figures about stroke.
 Australian Bureau of Statistics. (24 November 2014). Work Related injuries Australia (cat. No. 6324.0)