What is Income Protection Insurance, and who needs it?
Income Protection Insurance is affordable for most people, especially if you insure for what you need and don’t load your policy up to maximums with additional bells and whistles. Remember, if you are earning income for the household, then you’re the biggest asset.
You are going to earn more than your car is worth, or most likely even what your home is worth, and we don’t think twice about insuring our car or house, yet all that, can go out the window if you lose your ability to earn income to pay for these.
Income Protection is also known as Income Cover, Disability Insurance, Loss of Earnings. Still, they are generally the same concept but can differ with each insurer, and the fine print in these types of cover is critical.
How much income protection insurance cover do you need?
That’s a great question, and it would depend on what your needs are. For example, your priority could be to make sure the mortgage repayments are paid if you are unable to work, or maybe the mortgage and debt payments, or perhaps you want to insure for as much as you can. It all comes down to priority and affordability.
What are the costs?
Income Protection Insurance premiums will depend on the following:
- Smoking Status
- How long can you wait before the insurer starts paying you
- How long do you want your income replaced, for example, one year, two years, to age 65 etc.
Are there similar options available?
There are a few products in the market, and each has a specific job to do, for example, if you wanted to make sure your mortgage repayments are paid for you, then you may want to consider Mortgage Repayment Insurance.
Maybe you are a renter and want the rent paid and some other expenses such as loan repayments, power and phone then Household Expenses Cover may be for you.
Or Income Protection where you can insure up to 75% of your income.
The choice is yours, and there are plenty of options to keep costs down and insure what you need to. If you would like professional advice and what you could insure for and what the premiums would be, then please contact us anytime.