Families and households take many forms. You might be young, single and new to the workforce. You could be one half of a young working couple considering the purchase of your first home. Or you could be the sole breadwinner whose partner is occupied full-time in looking after the kids.
Whatever your situation, you have a lifestyle to which you are accustomed (and quite likely one to which you aspire) and it certainly includes a number of financial commitments: rent or mortgage, vehicle expenses, food, phone, utilities – to name only the most basic requirements. And the chances are pretty good that this lifestyle of yours is dependent to a large extent on your ability to keep the money coming in.
So what would happen if your income suddenly stopped? How would you pay the mortgage, the car payments, or the electricity bill?
You may think that serious injury or illness is a remote possibility—and you’d be in good company, as surveys have shown that 4 out of 5 Australians feel the same way—but the reality is less rosy. Statistically, you have a 75% chance of being diagnosed with a serious illness during your working life, which makes the fact that less than 1/3 of Australians have income protection all the more surprising.
Consider the figures: in Australia in any given year, 50,000 people have heart attacks, 50,000 people have strokes and 22,000 people receive injuries requiring long-term care and treatment from car accidents alone. There are also upwards of 120,000 new diagnoses of cancer each year with that number increasing. Any of these events could prevent you from working for anywhere from a few weeks to the rest of your life.
This is where income protection is so important. Rather than find yourself without an income and reliant on government handouts (which start at around $220 per week for singles) you can protect yourself with a policy that will pay you 75% of your usual income while you are unable to work.
Specifically, an income protection insurance policy covers you for lost income if you are unable to work due to sickness or injury. All you require is verification from your GP. You can receive payments for as little as three days off work and you are paid monthly until you can return to work. Depending on your needs and capacity, you can choose a policy that will pay you for up to two years per claim, up to five years per claim or up to age 65 if you are unable to return to work at all.
Finding the right policy for you is as simple as talking to an independent financial advisor about your situation. Your advisor will help you decide what kind of policy is best for you and will then find you the best rates available and take care of the entire application process with you.
Your entire lifestyle depends on your income. Chances are you already insure your car, home and home contents so why wouldn’t you insure the one thing that allows you to own those items in the first place?