Your personal sick pay
Illness or accident can mean that your cashflow will be messed up. And in turn, you might not be able to meet important payments (home loans, school fees etc etc ). If this worries you then a policy like this makes good sense.
Income Protection is designed to provide replacement of income – for those that are unable to work – due to illness or injury. It’s like your own personal sick pay scheme. Income Protection is available to both employees and the self-employed.
How much will it cover?
Income Protection will generally replaces up to 75% of a person’s gross income.
Sick pay only lasts a short time
Workers Compensation won’t last to the day you retire. (In fact, check out your Workers Compensation and you will see the Devil in the detail!)
It’s your choice!
Insurers generally offer different levels of policies with varying inclusions and depending on options taken, cost can vary significantly. These include:
- Waiting Period – The longer the waiting period the cheaper the premium.
- Benefit Period – the maximum length of payout. The options include 6 months, 1 year, 2 years, 5 years, until age 65 and until age 70.
Income Protection is generally tax deductible, however claim payments are considered assessable income for taxation purposes.
Like all things that involve money, its important that you understand what’s involved, the cost and the benefits!