Everything you need to know about income protection insurance 

 
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Why is income protection insurance important?

If your ability to work is taken out of your hands, income protection insurance can step in to assist. Learn more about income protection insurance policies that are available directly with Choosi, including how they work and how they can cover you during sickness or injury for policies Choosi arranges direct offer.

 Receive cover for up to 75% of your monthly pre-tax income*
 Premiums are usually tax deductible
 Choose from a range of optional covers
 


 

Life is about more than work, but without an income it can be tricky to meet life’s demands. Think back to the last time you got paid. What did it go on? Bills, mortgage, rent, debt repayments, savings and maybe a treat for yourself or the family?

Then imagine if that was your last pay cheque for a while. Would the next month be tough? What about the next? What if you didn’t know when you could start earning money again?

When your salary stops because you are sick or injured it can have devastating consequences on you and your family’s financial situation.

Unfortunately, 43% of males and 39% of females over the age of 15 suffered a serious injury or illness between 2002 to 2011, according to a 2014 report based on the Household, Income and Labour Dynamics in Australia (HILDA) Survey.1 And it doesn’t just have to be one serious illness or injury: over the same 10 year period 10.2% of males and 8.9% of females experienced a serious injury or illness twice from 2002 to 2011, and 10.5% of males and 8.9% of females experienced it three times or more.2 Income protection insurance helps you meet your financial obligations when you are unable to work due to injury or illness.


What is income protection insurance?

Income protection insurance pays an income benefit of up to 75% of your monthly pre-tax income if you become unable to work due to Injury or Illness – up to $10,000 per month (a waiting period and benefit period applies) for policies Choosi can arrange direct. In addition, you have the option of adding rehabilitation benefits which are designed to help you get back to work.

Depending on your policy and your insurer, you can be in control when selecting your income protection cover. You can choose the percentage of your wage you will be paid up to certain limits, the waiting period before your payments start, and how long you will receive payments – all depending on the policy you choose.

Considering all your essential financial obligations can help you work out the percentage of your wage you require to maintain financial independence. Income protection insurance will help you keep your income at that essential level. The result is that bills and commitments can be met as normal, allowing you to focus on your recovery so you can return to work.

 
Income protection insurance can help you pay for necessities.
Income protection insurance can help you pay for necessities if you have to stop work due to Injury or Illness.

Who can apply?

If you have been working at least 20 hours a week for the past 12 months, and are an Australian resident between ages 18 and 59, you can apply for income protection insurance with Choosi.

Some policies don’t even require medical tests in their application process. It is your responsibility to update the insurer of any changes to your income, employment, or health throughout the duration of insurance when applying for or changing your cover.

Do I need income protection insurance?

How does it work? Apply in 3 easy steps

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    Step 1. Compare

    Request a quote. Choosi’s team of Choosers will help you compare policies.

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    Step 2. Choose

    You then review the policies on offer and choose a policy that suits your needs, lifestyle and budget.

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    Step 3. Apply

    Apply for your preferred policy through Choosi

    a. Select percentage of income you would want to be paid (up to 75% of your monthly pre-tax income)
    b. Select a waiting period (30 or 90 days)
    c. Choose your benefit period (up to five years for some policies)

What does it cover?

Type Benefits When the benefit is paid
Serious Illness & Injury

Income benefit will be calculated as the lesser of:

  1. The monthly amount insured; and 
  2. 75% of your Pre-Disability Income.
  1. When your capacity to earn an income in your regular occupation is affected due to you suffering a Disabling Sickness or Injury; and
  2. You remain continuously disabled during and after the end of the waiting period.

View the PDS for all of the detail.


Regular expenses that could continue to be covered with income protection insurance if your capacity to work changes:

  1. Mortgage or rent
  2. Council rates
  3. Phone, internet, water, electricity, gas, and other utilities
  4. Personal loans
  5. Car loans
  6. Credit card debt
  7. Education costs
  8. Food and groceries
  9. Travel, entertainment and sporting activities
When you include optional extras in your cover, you could get even greater protection for you and your family. These options may include rehabilitation benefits, homemaker cover, children's insurance and final expenses insurance.

Tax benefits

A benefit of income protection insurance is that premiums that are attributable to an income benefit may be tax deductible.3 This means depending on your circumstances and if you’re working, you may be able to claim your premium as a deduction at tax time. This could make income protection even more affordable.

Find out more about optional benefits for income protection

Choosi makes the process of choosing insurance simple. Choosi’s team of Choosers can cut through the jargon and help you to understand the differences between policies. We can help you choose the right cover for your situation, and even lend a hand with the application process. Request a quote or contact our team today.


*Up to a maximum of $10,000 per month. A waiting period and benefit period applies.

This is general information only and does not take into account your personal objectives, financial situation or needs. You should consider the relevant PDS available on this website prior to purchasing any product. Choosi offers insurance products from a range of brands but does not compare all products available in the market. 

References  



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