Everyone who has an income has something to lose. Life gets pretty hard pretty fast if, for some reason, you stop getting paid. Even if you don’t have kids, dependents or a mortgage, income insurance is something you’ll wish you had in case of the unexpected occurring.
Below are 5 simple reasons to consider income insurance, but first, here’s a real-life example of a BlueRock client who unfortunately made a claim, but fortunately had some excellent life insurance advice.
An Example of Income Protection Paying Out
Our client, a high-ranking airline captain and one of the fittest (and smartest people you could ever meet) noticed a lump in his neck while shaving one day. Being a pilot, his employer (a major international airline) had strict medical regulations and doctors on hand. Within a week he had a biopsy, scans and tests done. In the days following, a second lump was found and results had come in.
It was an aggressive form of laryngeal cancer. While the diagnosis rocked his world and caused a lot of stress among his family, he knew it would be ‘all good’ when it came to the finances. And he was right, with the income insurance in place he was paid 75% of his salary for 18 months while he went through treatment (ultimately making a full recovery, getting back to work and doing 500km a week on the bike).
In addition to his income insurance paying out, our client also received a lump sum payment of $630,000 because he had trauma insurance as part of his life insurance package. Not a bad silver lining!
5 Simple Reasons to Consider Income Protection Insurance
1. Maintain your existing lifestyle
Income insurance can help provide an alternate stream of income allowing you to focus on getting back on your feet if prolonged illness or injury is preventing you from doing your usual job. The potential payout from your insurance can allow you to maintain your current lifestyle and help you stay on top of bills and other financial commitments such as, school fees, rent, mortgage or car repayments, allowing you to focus on getting better.
2. Reduce financial stress on family members and loved ones
Do you have other family members who are dependent on your income? It’s a good idea to consider income insurance if you’re the sole earning family member or if your salary supports others' livelihoods. It can help ease financial stress on your loved ones if you’re out of action due to serious illness and injury.
3. Protect yourself as a small business owner
As experts in small business advisory, we know that owning your own business brings a great sense of pride and achievement. But being your own boss can also mean you don’t have paid benefits like sick or annual leave to fall back on if something happens to you. Income insurance offers a financial safety net if you’re off work, so you can focus on your recovery.
4. Plan for the future
Adversity can strike anyone at any moment. When we’re fit and healthy, we often think there isn’t a need for income protection, but it’s important to consider having a plan in place if the unexpected happens. How would you cover your existing ongoing expenses like rent or loan payments? From our experience as life insurance advisors, we see the unexpected happen to 30 year olds just as often as 60 year olds.
5. Enjoy possible tax benefits
Your income insurance premiums are generally tax deductible if you hold a policy outside of super. Tailored products can also be added to your super and paid from your fund. There are options and flexibility to lower your premium. Choosing a longer waiting period before you start receiving your benefit is one of them.
Review Your Income Protection Levels
Our Private Wealth advisors offer market-leading advice tailored to your evolving circumstances and life goals. Get clarification on your life insurance policy or find the right tailored insurance for you and your personal circumstances. With access to a wide range of providers, we’re able to review your life insurance levels and make tailored recommendations on how to help you achieve the desired outcome.
Get in contact with our life insurance advisors today to set up a meeting or get a quick quote .
This article is intended as general information only and should not be considered as advice on any matter and should not be relied upon as such. This has been prepared without taking into account any individual objectives, financial situation or needs. You should therefore consider the appropriateness of the information in regards to these factors before acting or seek advice before making any financial decisions.
