Would you be prepared to face a disability?

Do you take your health and wellbeing for granted? This is true for many of us, but unfortunately the reality is that accidents and illnesses can and do happen. And when they do, there is a potential for your earning capacity to be affected.

It’s not something that anyone wants to think about, but being prepared can go a long way towards helping you feel financially secure in the event you become disabled or suffer a permanent injury.

Disability in Australia

According to Deloitte, one in three people are likely to be disabled for a period before they reach the age of retirement, but despite these figures less than 30 per cent will have prepared themselves adequately with products such as income protection insurance.1

Meanwhile, 2012 research from the Australian Bureau of Statistics (ABS) shows almost one in five Australians reported a disability, with Tasmania and South Australia recording the highest prevalence rates.2 Approximately 60 per cent of people with disability who lived at home said they needed help with an everyday activity, and over 1.1 million people with a disability aged five years and older said they didn’t leave the house as much as they wanted to.

How can it affect your income?

As the figures above illustrate, a disability can have serious effects on many areas of your life, not just your ability to work. However, when it comes to earning an income there’s no denying a disability can have a serious impact. On the 21st anniversary of the International Day of People with Disability, 3rd December 2013, the ABS looked back at 21 years worth of data about Australians living with disability.

They found labour force participation rates hadn’t seen any significant improvements, with 53 per cent of people with disability joining the labour force in 2012. That’s a significantly lower amount compared to the 83 per cent of people without a disability who participated in the Australian workforce during the same year.2
An issue paper published by the Australian Human Rights Commission stated people with disabilities are less likely than others to be employed, and women in this category are less likely to be in the labour force compared to men with disability.3

The recovery process after a disability and the experience of learning how to live with one can be challenging, and the last thing you need during this time is the added concern of providing for yourself and your family.

If you are currently healthy, Income protection insurance can be a good way to protect your financial security if you are unable to work, giving you a monthly benefit in place of your regular income. Specifically for policies available directly through Choosi, you can choose a policy which offers cover for a benefit period of up to 5 years. You will need to serve a waiting period before receiving your benefit and this could be either 30 or 90 days.

In addition to this, you can also choose to have optional rehabilitation benefits added into your policy to help you through the recovery process.

There are a variety of different income insurance policies on offer in Australia, so it can be helpful doing some research beforehand to determine which is best for your needs. Comparing income protection insurance policies can help you weigh the benefits and disadvantages of a particular product against others, in regards to waiting periods, level of cover and more.

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  1. Income protection – an opportunity to extend benefits to your members [PDF], Deloitte.
  2. 21st anniversary of International Day of People with Disability – Have we made progress?, media release, Australian Bureau of Statistics.
  3. National Inquiry into Employment and Disability: Issues Paper 1, Australian Human Rights Commission.

These articles are provided as reference material to allow more informed decision making, but are not intended as being a complete source of information on any topic. All readers should make their own independent analysis on the topic to make sure they have considered the aspects that are important to them.