…in getting the best out of your personal risk protection
Income Protection Insurance matters because it provides cashflow certainty –
- to sustain your cashflow
- at a time when you are unable to physically earn your regular income.
In superannuation accounts, this insurance is Salary Continuance insurance. It provides regular payments for an agreed period of time, starting thirty days after the latter of:
- lodging your successful claim; and
- satisfying your agreed ‘waiting period‘.
Why consider Income Protection insurance?
- To provide regular cashflow when the life insured becomes disabled or severely ill; and,
in relevant circumstances - to ensure that business continuity is facilitated when the owner is incapacitated.
Income protection insurance matters to, whom?
Unless you are confident that each of the following situations will be in hand during your recovery period, income protection should be in your insurance portfolio: it will matter to your family…
If you suffer an illness or injury that takes you out of work for an extended period –
- will your family be able to:
- Meet the monthly commitments to preserve their lifestyle?
- Continue to pay the mortgage/ debt repayments?
- Service the long-term investment needs required to maintain your wealth accumulation strategies?
- Meet all medical costs during the term of incapacity?
- Provide the financial capacity to maintain these situations?
How much Income Protection Insurance is enough?
The amount of monthly benefit to insure for is based on the level of income you regularly enjoy. There are a couple of ‘exceptions’ that can apply in that regard. Upper limits apply:
- they are controlled under government regulation, and are
- specified in the schedule to your policy, however
- the insurer may also allow for superannuation contributions above that level; and
- there may be provision for rehabilitation expense recovery as well.
It is possible to insure for a lesser percentage of the insurable income: also –
- your appropriate waiting period (how long you need to be disabled or off-work, sick); and
- the benefit term for which you insure,
are important considerations as to the premium (cost) of the protection. To a lesser extent, the availability of the protection may also be impacted.
The following matters are brought to account in considering this insurance –
- Sick leave
- Special leave
- Existing insurance cover?
Continuum Financial Planners Pty Ltd is available to assist..
Were unable to answer Yes to the questions above? Would like to better secure your/ your family’s financially independent future? To secure an appointment with one of our experienced advisers, please –
- phone our office on 07-34213456, or
- at your convenience, use the linked Make A Booking facility.
You can be assured of –
- personalised, professional wealth management advice, as
- we listen to your circumstances, we understand your needs and we provide solutions,
that will keep your financial strategies in focus.
(This article was first posted by us in March 2010. It has occasionally been refreshed/ updated, most recently in January 2025.)
