Many people rely on their regular pay cheque, and would be lost if for some reason they were unable to turn up to work and make a living.
Yet, life is full of unexpected turns, and sometimes it is best to be prepared for everything.
Income protection insurance is designed to cover you financially if you are in an accident or develop a serious illness.
The majority of income protection policies will pay you up to 75 per cent of your regular income, allowing you to receive monthly benefits while you recover from your accident or illness. Be sure to check the Product Disclosure Statements to see what the maximum monthly benefit will be as this varies for different policies.
This type of insurance is arguably one of the most important, as a loss of income could result in some major challenges for you and your family, such as the inability to make mortgage or rental payments.
If you are injured or fall ill and are rendered unable to work, your life may change but the rest of the world still goes on – your ongoing expenses will not come to a sudden halt.
By covering yourself with income protection, you will have peace of mind that you will be covered if life unexpectedly throws you a curve ball.
What will my income protection insurance cover?
Unlike life insurance – which only covers you in the event of your death or of total permanent disability – income protection will cover you if you fall ill, sustain an injury or suffer a traumatic incident.
For example, you may be involved in a car accident and be injured to the point that you can no longer do your job whilst you are recovering. Or, you may contract a serious illness which means you are unable to work for several months.
Income protection insurance will help you cover all those regular expenses, without risking your health by attending work.
What sorts of policies are available?
There are a range of different insurance policies to choose from, which will determine the overall amount you are paid in the event of an accident or onset of an illness.
The premiums and the time it takes for you to receive your first payment vary from policy to policy, so it is important to read the fine print and shop around until you find cover that you are happy with.
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.