Income protection

Income protection insurance protects you against a loss of income through injury or illness.  Income protection can pay you up to 75% of your normal annual income for 2 years, or right up until age 65.  It can be an invaluable way to protect you and your family against unforeseen circumstances that prevent you from returning to work.

Income protection insurance can be vital if you’re:

• A small business owner or self-employed
• Supporting a family
• Still paying off a mortgage
• Looking to maintain financial independence in the event of injury or illness
  

How much you should spend on income protection insurance all depends on your personal financial situation. Rather than think about it in terms of what it costs, it helps to instead think about what it would cost to be out of work.

Income protection insurance is designed to support you for an extended period of time. So, to determine how much you should spend on your income protection, it’s useful to start by working out your budget. Map out all your monthly expenses, and match this against the income you’d usually earn. It’s also a good idea to plan for super payments, too, so you can continue planning for your future.

So ultimately, what you spend on your income protection will be determined by the level of cover you require, and the value of the quote you receive. We can connect you with our network of over 15 trusted insurance providers, to ensure you get the best income protection insurance quote for your situation.

There are a number of things you need to take into account when choosing the best income protection insurance policy:

• Waiting periods. Generally, income protection insurance policies will include a waiting period of anywhere between 14 days, up to 2 years in some cases. You’ll usually find that the shorter the waiting period, the more expensive the policy, and vice versa. So when choosing your policy, be sure to factor in whether you have sick leave, annual leave, and savings or emergency funds available.
• Benefit periods. The benefit period in your income protection policy is the period of time during which your payments last. Most income protection policies offer periods of between 2 and 5 years, or up to the age of 65. Typically, the longer your benefits last the more expensive your policy will be—but it also means you’re covered for longer.
• Premiums. You will usually find you can pay your income protection insurance in one of two ways. Under a stepped premium your policy is recalculated every time it renews, and will usually increase as you get older. A level premium charges a flat rate at the outset, which is usually higher than a stepped premium, but isn’t likely to increase as much as your policy progresses.