Updated: Oct 22, 2018
Did you know that the average annual wage is $84,661, meaning the average Australian could potentially earn $10,200,000 over a 40-year working life*. They would use this money for daily living, for holidays, to accumulate assets like a house and car, paying off their mortgage and to save for their retirement. However, if anything happened to them and they became injured or ill, even for only a short period, their plans could be be affected big time.
What would you do?
Put yourself in that person's position. Which option would you pick?
• If it is a work-related injury/illness my employer may compensate me until I return to work
• I will start tapping into my sick leave
• I have some personal savings
But this may only meet nominal living expenses - you might have to continue paying off your mortgage along with medical costs, some of which may not be covered by Medicare or your private health fund. How will you do that?
Insuring the risk
Income protection insurance usually pays up to 75% of your regular pay while you’re off work. You can tailor a policy to suit your situation. For instance,
• How long must you be off work before payments start?
• How long will you receive the income?
In addition to the core provision to pay a replacement income, most income protection policies also offer a wide range of supplementary benefits. These vary from policy to policy, but may include:
• Rehabilitation benefits.
• Travel and accommodation costs, for example, to return you home if you are injured while overseas.
• Childcare benefits.
• Specified injury benefits that pay an additional amount if you suffer things like broken bones, loss of sight, paralysis or other stated conditions.
• Bed confinement or nursing benefits.
• Elective surgery benefits.
• Family support benefit or accommodation benefit, payable if a family member needs to travel from their usual place of residence to be with you.
• Total and permanent disability benefit.
• Death benefits.
Premiums are usually tax-deductible, and the income is taxed in the standard way through the PAYG system.
Don’t become another statistic. Get in touch with one of our qualified and experienced financial advisers at 1300 707 955 to inquire about investing in an income protection policy to suit your circumstances and your current responsibilities.
You will sleep easier knowing that your lifestyle and financial plans will stay on track regardless of sickness or injury.
* Based on full-time adult average weekly total earnings, with a 5% annual wage increase.