Income Protection Insurance

Income Protection (IP) / Total Salary Continuance (TSC)
What would happen if you had to stop work due to sickness or injury?  How would you pay your bills if your income stopped?  Being ill or injured is difficult enough, without the financial pressure of not being able to earn an income.  You can protect your income and maintain your lifestyle with the right Income Protection Insurance.
Income Protection is a valuable form of insurance and generally provides 75% of your income if you are sick or injured and are permanently or temporarily unable to work.  Premiums are generally tax deductible. Benefits are normally paid monthly and like your income, are generally subject to tax.
While there is little we can do to protect ourselves against the physical impacts of an injury or illness, we can protect ourselves and our families against the financial consequences.  As they say, emotional pain is unavoidable but financial stress is optional and is incumbent on the financial decisions you make in life!
So how can you protect yourself?  With Income Protection Insurance planner in Sydney.
Income Protection Cover can be available both outside and inside of Superannuation.
You should consider having Income Protection Insurance Cover if you:

  • Have a family and dependents
  • Have a Mortgage
  • Have other debt (car loan, bank overdraft, credit card,)?
  • Would need money to live on if you could not work again
  • Do not have savings to cover unexpected expenses, for example – medical bills
  • Have a business or business partners, are self-employed, or are a company director or key employee

When will the insurance provider pay you a benefit?  
They will usually pay a Total Disability Benefit if you can’t do any income earning work at all for longer than your nominated waiting period.  In that case the insurance providers will pay up to 75% of your pre-disability income. Some providers will even offer a choice between a lump sum and monthly benefit payment.


Can I have my Superannuation Fund pay for my Income Protection Insurance cover?
The answer is a big yes!  Most Superannuation (and even compulsory by law now) to offer you a default or minimum automatic acceptance Income Protection Cover.  However you need to make sure the insurance products offered by your Superannuation fund have got features that you are looking for.  For example you might want to know if the insurance product offers:

  • Agreed, Indemnity or Guaranteed Agreed Value
  • How much you could be insured for – the min and max income (usually $30,000 per month)
  • Benefit Period – up to the age of 65 years
  • Waiting period – 30, 60, 90 days or 1, 2 years
  • 24 / 7 Worldwide Cover
  • Stepped Premium (premiums increase with age – they are cheaper when you are younger, but more expensive over time)
  • Level premium (premiums do not increase with age – they are more expensive when you are younger, but less expensive over time)
  • Guaranteed Future Insurability (cover can be increased without medical underwriting if certain life events occur, such as getting married or having children)
  • Guaranteed Renewal (as long as you pay premiums, cover is guaranteed to continue regardless of changes to your health, pastimes or occupation)
  • Seamless and smooth claims processing
  •  Insurance Cover indexed to Inflation
  • Buy-Back feature if linked with Life Insurance Cover (has to be within Super!)

Some of the features listed above will be available at an additional costs and you need to decide on the Price / Quality trade-offs (as you would when doing your groceries – should you buy the cheapest product on the shelf or a premium brand at a premium price!!)

How can you adviser help?  Your financial adviser has been professionally trained to help you choose the right insurance options for you.  The exercise will usually start with a Strategic Risks Insurance Needs analysis and then will follow the optimum Insurance product solutions to meet your goals and objectives.  Talk to us now to find out more!


Did you know those Australian Facts of Life?

  • On average 305,000 babies are born every year
  • Last year, more than 121,000 couples were married but more than 48,000 couples were divorced
  • Nearly 10% of full-time Australian workers will leave the work force due to chronic illness
  • 61% of Australians adults are over-weight, 40% of which are obese
  • 1 out 3 Australians will either suffer from a heart attack, Cancer or Stroke
  • 4 Million people in Australia (18.5%) report having a disability.
  • Around 50% of Australians aged over 30 will suffer a major illness that can lead to long term disability and long term loss of income
  • In 2003, more than 3.6 Australians reported one or more impairments that restricted their everyday activities.  66% of these were under age 65
  • Approximately 44,000 Australians suffer a stroke each year, with strokes being the leading cause of long-term disability in adults.
  • 100% of Australians will die!

Source: Comminsure