Many people these days are choosing to have their income protection insurance within their super funds. Before we look at the positives, and the negatives, what actually is Income Protection?
Rate Detective Definition
Income protection pays you a monthly amount should you become totally (or with some policies partially) incapacitated for work due to an accident, illness or injury (including mental health). However this incapacitating does not have to be a permanent one. The benefits can be used to pay for your normal lifestyle and investment costs and mean you can maintain relative financial normality during this time.
let’s look at some of the advantages of setting Income Protection up through your super fund.
Okay so there’s some potentially attractive benefits, but what about the negatives.
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The negatives are worth considering and being prepared for, especially as they can sometimes make the claiming process problematic, and with an illness or injury, it might not be a time you want to deal with problems.
Some of the negatives of housing your income protection policy within super are:
The SIS Act's definition of 'temporary incapacity' requires the following key points to be met:
Gainful employment - the member must be in gainful employment before disability, and the disability caused them to cease gainful employment.