A quick Google search will provide a myriad of information regarding income insurance protection. But, not all of it is relevant to you. This is why we have prepared this short guide for you, our teachers, to provide a quick one-stop-shop for income protection information.
How income protection works
When or if, due to unexpected injury or illness you are unable to work for a period of time, income protection insurance can provide you with up to 75% of your pre-claim income for a set period of time. When selecting an insurance provider you must also select a benefit period and waiting period.
The benefit period is the amount of time you will receive your payment if you are unable to work. This period is commonly set at two or five years, or up to a certain age, normally 65. The waiting period is the amount of time from when you are unable to work, until you are able to make a claim. Again, there are several options, the most common being 14 days, 30 days or 90 days. Insurance premiums will usually vary based on your benefit and waiting period selections.
This premium is generally payable either out of your superannuation, or disposable income. Paying from super generally attracts a 15% up front tax rebate, while payments from income are usually tax deductible at your marginal tax rate.
Are you paying too much?
Insurance companies charge higher premiums for occupations or past-times deemed to have a higher degree of risk. For this reason teachers who teach ‘manual’ subjects such as manual arts, physical education, or agriculture are generally defined under a different category as those who teach ‘non-manual’ subjects such as maths, or english. It is important to make sure you are classified with the correct manual/non-manual rating to ensure you have the appropriate level of cover, and not paying more than necessary for your income protection.
Income protection for part-time teachers
Working part-time can mean you are even more reliant on your income to pay bills and day-to-day living expenses than a full-time teacher as, in some cases, you may not have as much savings to fall back on. As a part-time teacher you are generally still eligible for income protection.
To qualify for insurance most companies require the part-time employee to work at least 20 hours a week. However, eligibility conditions do vary between companies so be sure to compare offers and requirements.
If you have any questions regarding the information above, or any other queries regarding your insurance policy please give us a call to speak to one of our consultants who can provide you with general advice in relation to your questions.