When considering insurance, it’s common for people to pass it off as another added fee involved in owning a car, running a business or protecting a house against damage. Income insurance, on first glance, can seem like another costly precaution that’s unlikely to prove useful.
But when you think about how your income facilitates your lifestyle, it’s often at the top of the list in regards to things that you can’t afford to lose. Cars and houses can be replaced, but losing an income, perhaps for life, could see both lost.
Income protection insurance covers salary loss due to injury or sickness. Unlike workers compensation, it applies to injury or sickness at any place or time. And, unlike government allowances, it pays in accordance to your earning capacity.
If someone is injured under worker’s compensation, for the first few weeks they receive a higher rate, but then it drops. Therefore, people’s standard way of living is sacrificed if they depend on this form of protection.
Income protection policies vary in regards to their terms and conditions, but they usually offer 75 per cent of gross wages for a maximum time period. It’s a form of insurance that is particularly important for people who have regular repayments to make against loans.
The most important reason for income protection is when a person has a strong reliance on an income. When you have someone with ongoing financial responsibilities, like a family or a mortgage, that’s the most important time for income protection.
Having a majority of your current income insured against the possibility of being away from work helps you avoid defaulting on mortgage payments, personal loans or credit cards.
Holding adequate insurance can be the difference between remaining on track to meet any lifestyle or financial goals you have set following illness or accident, or being forced to dramatically change your lifestyle due to an inability to meet your financial obligations.
Most people these days have enough stress In their day to day lives. Income protection gives that little bit of extra peace of mind. It works when you can’t work. Considering how you will pay your mortgage if you were away from work for a period is essential, and we can work with you to help you find the right insurance to help ensure you are suitably protected. Get in touch with the team at The Wealth Connection to discuss your requirements.