Income Protection Insurance

Income protection insurance is a way to make sure your regular monthly bills and expenses will be paid in the event you become ill or injured and unable to work. This type of insurance pays up to 75% of your regular income for an agreed period of time.

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Who is a potential candidate for income protection insurance?

Ultimately it is you that will need to determine this. However you should ask your self the following questions: Health insurance will pay your medical expenses, but how will all your other expenses be paid? Who will cover the car payment and the mortgage if you’re suddenly unable to work? Who will pay for groceries when you have suffered loss of incomes? Income protection insurance is a possible answer to this problem.


What typically does an income protection insurance policy cover?

This policy provides regular payments to you, as if you were still getting a paycheck, if you become injured or ill. When you buy the policy, you choose how long you’ll have to wait after the injury/illness occurs before the insurance will begin paying you. This enables you to exhaust any sick leave or other time-off-work benefits you may have before turning to this insurance.

Also, an income protection policy will usually pay your superannuation contributions, and many automatically index for inflation each year.

What typically does an income protection insurance policy not cover?

Income protection cover does not take care of you unless you are actually too ill or injured to work. It does not pay out forever; when you take out the policy, you choose how long the benefits will be paid to you, generally a year or two. Most companies won’t continue your income protection policy if you are over 60. Also, if you are a small business owner, income protection insurance will not cover the expenses to keep your business running while you are recovering.

Additional insurance products that policy holders can look at reviewing for this type of product

Many people that hold income protection policies that own a small business also carry business overheads insurance, which will pay the usual operating costs to keep your business afloat while you are unable to work. Ttrauma insurance policies make sure you’re well-covered in the event a traumatic event such as a heart attack or stroke. And don’t forget life insurance, to protect your family in the event of your death.

Additional coverage for an income protection insurance policy
Illnesses or injuries covered can vary by company and by policy. Some offer options that will take care of you while you’re out of work after cosmetic surgery, in a rehabilitation program, or on unpaid leave for maternity, sabbatical or other reasons. Some policies will even cover you if you can continue to work, but at a reduced ability than what you could do before your injury or illness. Other optional benefits include paying for the lost income of a family member who must leave work in order to care for you.

What will income protection insurance typically cost?

The premiums for this type of insurance vary not only by insurance company but also by what benefit options you choose, how high your income is and how much you’ll need to replace with payouts from the policy, whether you buy the policy on your own or through your employer, etc.

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X-Life offers a comparison service where you can compare over 500 different policies.

Get a free quote from X-Life.

* Note that X-life does not compare all income protection quotes in the marketplace

 

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