What is Income Protection Cover?
Put simply, Income protection insurance aims to protect your income in the event that you can't work due to illness or injury.
How income protection insurance works
Income Protection insurance provides an income stream should you become unable to work due to an injury or illness. In the event of a claim, the insurer will pay an amount (normally up to 75% of your gross salary) until you have recovered sufficiently to work again, or up until the maximum benefit period as stated in the policy which is normally 2 year, 5 year or up to age 65.
Why do I need income protection insurance?
Ask yourself what would happen if you woke up tomorrow and found you were incapable of working for an extended period of time. How well could you survive without your income for a period of 12 months or longer? If you don't have savings how could you support your household, repay your mortgage or save for the future?
Income Protection Insurance is not something that you think about when you head off to work each day or go for that weekend drive or overseas holiday. You insure your home and car without a second thought. You always organise your travel insurance. You also need financial protection for yourself. Income Protection Insurance will protect your greatest asset... your income.
When things go wrong due to illness or accident your insurance will keep your income coming in. Income insurance is worth considering for all working people.
If you calculate how much income you earn and multiply that by how many years you have until retirement and then factor in inflation and wage increases,
you will see that it quickly adds up to a lot of money that would be lost if you were to suffer a long term medical condition without some form of financial protection.
Income protection is designed to help you avoid the financial stress of drawing down on your assets or taking on more debt if something unexpected were to happen
and you couldn’t generate income.
