Income protection insurance - not just about the amount you earn
Written on the 5 October 2018 by Arrow
A common misconception about income protection insurance is that it's only for high-earners, but this isn't the case. In reality, no one can afford to be without this safety net, regardless of the amount of income you earn.
The only things certain in life are death and taxes or so the famous saying goes. Thankfully, income protection insurance can add a positive guarantee to that list by safeguarding your quality of life, should an unexpected setback strike.
You can't predict the future, but you can plan for it
It's estimated that over 400,000 Australians suffer a heart attack sometime in their lives.i Then there's over 800,000 people of working age with disability, who were not working in 2015 alone.ii It's tempting to think that if you lead a healthy lifestyle and make smart choices, you'll be fine. But the reality is you can't predict the future, you can only plan for it.
Why it's not about the amount you earn
Consider what you and your family would do if you were unable to bring home the same pay cheque overnight. Remember, periods of unemployment due to sickness or injury are reasonably likely over the lengthy course of anyone's working life.
Parents, particularly single-income families, have the consistent pressure of providing for their children. While it might appear smarter to give precedence to other family expenses, this demographic can be hit hardest in such events, making income protection insurance a must.
Another misconception is that singles or couples can forgo income protection. Although finances might be comfortable day-to-day in a steady job, things may not always be so stable. It makes even more sense for the self-employed or small-business owners, whose monthly income can often be inconsistent, to consider income protection.
Then there's the trap of thinking life insurance is all you need. Unexpected death is absolutely a part of life we should all plan for. But an unforeseen total or partial disability due to injury or illness is a debilitating situation that can stop you earning a living, and is equally unwise to overlook.
What does income protection cover?
An inability to keep up with the mortgage, loan or credit card repayments can cause considerable stress when you're unwell. It's crucial to focus on recuperation at such a time, with full confidence that these debts can be provided for under your policy.
Talk to us if you'd like more information about income protection insurance.
First published: 1 October 2018