Maintaining your lifestyle – What is income protection?
If you’re like most people, your way of life is at least partially dependent on your ability to work. Therefore, an extended absence because of sickness or injury could be devastating to your lifestyle, and that of your family. Income protection is designed to help in such circumstances, replacing your income if you are unable to work as a result of sickness or injury. The maximum cover is usually 75% of earnings. However, optional additional benefits may be available.
What this means for you
The benefit paid by income protection can help you keep up with all of the expenses your income usually takes care of. That includes things like mortgage repayments, groceries and your regular bills. This money also means you don’t have to rely on family and friends, government assistance, or leave entitlements from your employer — none of which are guaranteed to provide a sufficient level of financial support. It’s important to note that benefit payments for income protection usually don’t start immediately, as a waiting period can apply during which no benefit is payable (this could range from 14 days up to two years).
Exclusions may apply for certain events. Insurance policies will often vary in their features and benefits, so you should work with your financial adviser to choose a policy that suits your needs and your budget.
What are the chances?
- According to the Life wise/NATSEM Underinsurance statistics, some 17,000 working age parents suffer an illness or injury so severe they are forced to stop working every year.
- More than 15% will be disabled for more than 3 months during their working life.
- Few people can afford any major financial setbacks in their life, which is why it is important to speak to a financial adviser now to ensure you and your family are protected