Put simply, Income protection insurance aims to protect your income in the event that you can’t work due to illness or injury.

How income protection insurance works?

Income Protection insurance provides an income stream for you should you become unable to work due to an injury or illness. In the event of a claim, the insurer will pay an amount (normally up to 75% of your gross salary in Australia) until you have recovered sufficiently to work again, or up until the maximum benefit period as stated in the policy which is normally 2 year, 5 year or up to age 65.

income protection

Income protection insurance provides cover for individuals, 24 hours a day, anywhere in the world, regardless of impairment.

If you don’t have savings how could you support your household, repay your mortgage or save for the future? You may think Workers Compensation will cover your costs in the case of an accident, but Workers Compensation protects you if your injury is connected with work. (You can read more in our article Income Protection versus Workers Compensation).

income protection

•If you are employed: 75% of your current gross salary (including employer packaged fringe benefits and superannuation contributions).
•For self employed: 75% of the income generated by the business due to your personal endeavour less your share of expenses.
•A lower percentage of income may apply above certain income limits ($250,000 for example) and overall maximum levels of monthly benefit sum insured will apply.

You need to consider what the costs are of meeting your debts (mortgage, etc.); providing sufficient funds for a spouse, children or other dependents; and maintaining your assets & investments. Remember, the point of income protection insurance is to provide an income stream if you can no longer work.

income protection

Premiums are set depending on:
•Age – The cost of obtaining cover generally increases over time
•Gender
•Health and pre-existing conditions
•Whether or not you smoke – If you are a smoker, or if you have smoked within the last 12 months you will pay more in premiums compared to a non-smoker. However should you already have a policy and premium based on smokers’ rates and you have not smoked in the last 12 months you may be able to have your premiums reduced back to non-smokers rates.
•Occupation – If you are involved in a hazardous occupation or where there are more risks involved, you will pay a higher premium compared to a professional office worker.
•Waiting period – i.e. how long can you be off work before you require the income to commence. Generally the waiting periods range from 2 weeks to 2 years.
•Benefit Period – This is the maximum length of time following the waiting period that the policy will pay the benefit for. These can either be for a set period (2 year, 5 year) or until a certain age (to age 65). If you are able to return to work because you have recovered from your sickness or injury then the monthly benefit will cease at that time.
•Additional policy features – Whether you would like a ‘comprehensive’ or ‘basic’ policy or any additional features will also affect the cost of cover.
income protection

If you would like one of our specialists to review your situation, please complete the Fact Find document that you will receive upon your initial enquiry and return via email at your earliest convenience. If however, you are satisfied with your own queries and therefore would like ‘no advice’ regarding commencement of Life, TPD, Trauma, Income Protection or Business Expenses insurances, please let our consultants know during your discussions.

And more! Enquire now and you’ll receive a 20% cash rebate for your first year’s income protection insurance premiums! This offer valid for Rate Detective clients only and you will not receive it by going through the insurance companies and asking for income protection insurance yourself.

income protection

Check our guide about “Types of life insurance if you want more information.
How much does life insurance cost per month?

There is no simple answer to that question. There are too many variables. The 4 major ones are:

* What is your age?
* What is your gender?
* Are you smoker or non-smoker?
* What amount of insurance?

Here at Rate Detective we try to take these 4 major factors into place when designing our life insurance quotes estimates. Overall life insurance is cheap compared to the expenses you have if worst happens.

Term life insurance helps to protect the life insured’s family by providing a lump sum in the event of death, which could be used to meet needs such as:

* Children’s education costs
* Mortgage and other loan repayments
* Enabling the life insured’s business to keep running
* Meeting the family’s ongoing income needs

If you are a young man reading this thinking life insurance is the last thing in the world you need right now, the following are 5 reasons why you could not be more wrong as to why you need to take out a life insurance policy today!
1. Parents
As well as providing us with the necessities in life, earning a wage also allows us certainly luxurious in life. Unfortunately, once we retire, our pensions are rarely enough to continue living life in the manner we have become used to while we earned a salary. In order to offset this dramatic change in lifestyle, many children help their parents by giving them money to tide them over. However, if you were to die today, who would look after your parents in the future – the government? Having your parents named as beneficiaries under a life insurancepolicy could mean the difference between them enjoying the remaining years of their life and struggling once you have gone.
2. Spouse
If you are married, even if both of you are working, chances are you are living an expensive life. Most likely you have a mortgage, car repayments, and possibly loan repayments. You most probably like to go on holiday once a year too. However, what will happen to your spouse if anything happens to you and you are not insured? For sure they are going to have a dramatic change in their life, and it won’t all be down to the fact that you are no longer here.
3. Children
If you have children then they are possibly the biggest reason why you should have life insurance. Children are dependent on us to buy them food and clothing. Children need money from us to survive. Children need us to pay for their university education. All of these become immensely more difficult to provide for if you die without life insurance. Would you really want your children to suffer because you don’t want to pay a very affordable premium today?
4. Pension
With a whole life insurance policy you can start to save money for when you retire. Due to the compounding nature of interest, the earlier you start the bigger the nest egg you’ll have. So, if you are happy with the idea of living off a government pension when you retire – fine. Otherwise, think about getting insured!
5. Funeral costs
Today’s funeral costs are exorbitant! If you die and do not have an insurance policy someone else will have to be responsible for paying the very high cost of your funeral. On the other hand, if you have a life insurance policy, you can arrange the funeral party of your choice.