Income Protection

'As your most valuable asset is your ability to earn an income, your income should be your first asset insured'

Income Protection
Income Protection insurance covers your most important asset: your ability to earn a regular income. This type of insurance provides an income stream in the event you suffer a major illness or injury that prevents you from working. Benefits only commence to be paid from the expiry of a waiting period until the end of a benefit period.

Most insurers offer the choice of a 14 day, 30 day, 60 day, 90 day, 1 year or 2 year waiting period.

Most insurers offer the choice of a 2 year, 5 year, to Age 60 or 65, and in some circumstances to Age 70 benefit period.

Income Protection insurance is designed to replace 75% of your income and the two types of cover available are:

  • Agreed value
  • Indemnity

'Agreed value' policies cover for the full monthly benefit that would have been agreed on at the time of your original application. Proof of income would have been required initially or subsequently. Under an 'Indemnity policy', you are covered for what you are earning at the time of claim. This will mean that proof of income will be required at claim time and the monthly benefit may be reduced accordingly.

The definition for claim will depend on the insurer and partial payments are made in certain circumstances.

Income Protection insurance can be taken inside or outside of the superannuation environment. It is important to note that all current and relevant superannuation legislation applies (eg. Capacity to contribute, contribution caps etc.).

Premiums paid on Income Protection insurance held outside of the superannuation environment may be tax deductible to the premium payer.

If you would like to know more about this product and how it can protect you, please contact us.

Any advice or recommendation that may have been implied is General Advice only. Please be aware that we have not taken into consideration your needs, objectives or financial requirements. Before deciding to purchase a financial product, you should read the Product Disclosure Statement to ensure the product is suitable for your needs.