Services: Income Protection Insurance
Who is going to pay the bills if you can’t?
Many people consider their major asset to be their home, contents or in some cases, their investment portfolio. The truth is, these assets may not exist if the individual did not have a consistent, reliable income.
Imagine if your income stopped tomorrow. How long would you be able to cope financially? Bills won’t stop coming in. And if you have any debts, the bank won’t stop taking out your repayments.
Take a look at the following questions which will help you better understand and identify the areas you may consider need attention in the event of sickness or injury:
1. Could you maintain your current lifestyle on Social Security Benefits?
2. Will your accumulated sick leave cover you if you were off work for over a year or two, or even more?
3. If you were only partially disabled and on a reduced income, could you maintain your current lifestyle?
4. If you didn’t have your income, could you maintain your Superannuation arrangements?
5. Would loss of income disturb your family’s financial position?
Even if you think your health is stable, accidents happen and so do illnesses. In fact one out of every three Australians will be unable to work for more than three months at some stage in their lives because of sickness or injury.
Income Protection will pay you a monthly benefit up to 75% of your Gross Income, including Super if you can not work because of a sickness or accident, 24 hours, worldwide coverage. In todays economic down turn, families are in financial hardship, but they all hope that the economy will recover sooner than later. Have you ever considered what would happen if your down turn was due to a sickness or accident that left you unable to return back to work EVER, and you had no control on whether it would recover or not.
Source: Institute of Actuaries – Report to the Disability Committee, May 1995
Case Study
I have been an accountant for more than 10 years and have always been aware of the value of life insurance. But, it wasn’t until I started my own business that I went and saw a financial planner colleague who recommended I take out life insurance for the first time. I didn’t realise it at the time, but this would end up being one of the best financial decisions I would ever make.
My friend and planner recommended that I take out insurance including Income Protection to ensure that my family were not put under financial pressure if I were to suffer an illness or injury. Three years later, just as my business was really taking off, I was diagnosed with throat cancer. This was a huge shock to myself and my family.
Shortly after my Insurance claim was lodged, I received a call from the claims department telling me I would receive a benefit of $300,000 to be paid immediately and that my monthly income protection would also commence after my waiting period.
I used the recovery benefit to pay for the treatment costs and we could then afford for my wife to take time off work to be with me. This Insurance benefit covered our day to day living expenses including mortgage and other essential bills. Most importantly though, it meant I wasn’t forced to return to work and was given adequate recovery time. My planner was instrumental in ensuring my family was covered appropriately if anything were to happen to me.
*Based on a real claim.