Income Protection Insurance - Now Is The Right Time!

If you have been considering taking out Income Protection Insurance, then now is the ideal time to set this up.

The end of the financial year is fast approaching and all policies taken out before the end of June will be able to receive a tax reduction.

Income Protection will provide an income if you are unable to work due to sickness or accident. Many policies cover up to 75% of your salary, and are very flexible and can be tailored to suit your individual and family circumstances.

Income Protection Insurance through your Super or Not?

Some people are choosing to buy their Income Protection through their super because it can be more cost effective to buy these types of Insurance through a super fund.

There are disadvantages and advantages of Income Protection Insurance inside Super.

Advantages:

• They are generally cheaper as you are accessing wholesale rates.
• Group policies involve automatic acceptance up to a set level of cover with no medicals being required.
• Whether you are a smoker or non smoker you would pay the same rate.

Disadvantages:

• The main disadvantage is that there is an added layer of complexity in the event you need to make a claim; you will need to satisfy the insurer and the trustee of the super fund to receive a payout.
• Another disadvantage is that you do not actually receive the benefit it goes via the trustee and you have to meet a condition of release.

Consumers need to compare the terms and conditions of the policies on offer from their super fund and those available outside.

Other Income Protection Features to consider 

Some policies are sold without underwriting and medical checks and are cheaper but these policies generally come with more restrictions and lower benefits. The cost of the cover depends on the level of benefits, the maximum benefit period, your age, gender, occupation and whether you are a smoker or non smoker.

Income Protection is available either as Agreed value or as Indemnity.

Agreed value is where the benefit level is set at the time that you take out the policy, or indemnity is where the benefit is determined by your gross income in the year before disability, which is 75% of your pre-disability income.

You need to check all exclusions before selecting an income protection policy.

To find the right income protection insurance policy that meets your requirements please give us a call on 1300 793 143 or fill out the form on this page and let one of our experienced advisers point you in the right direction.