What Is Income Protection Insurance?

from ATB Wealth Strategies, Sydney

What Is Income Protection Insurance?

One of the questions we’re most frequently asked at ATB Wealth Strategies is — what is income protection insurance?

Think of it like this.

Currently, your monthly salary — whether generated from employment or business ownership — delivers you with a solid income to meet both your day-to-day and long-term commitments.

But, life has an unfortunate tendency to throw an unwelcome spanner in the works. If illness or injury prevents you from working — do you currently have sufficient funds and assets to continue to support yourself and your loved ones?

Income protection — also referred to as salary continuance or income replacement insurance — provides you with a regular income, typically a percentage of your salary, while you’re incapacitated.

Income Protection What Is It
Forming a crucial part of your overall financial planning strategy, it permits you and your family to satisfy household bills and expenses — while providing relief from money stresses, giving you breathing space to restore your health and wellbeing.

At ATB Wealth Strategies, our expert team of financial advisors will formulate a tailored income protection plan to provide the ultimate in peace of mind. Speak to us today to guard yourself and your loved ones from the unexpected.

Speak to us today to guard yourself and your loved ones from the unexpected.

What Is Income Protection Insurance in Australia Going to Cover?

Unsurprisingly, income insurance coverage varies greatly from provider to provider — and is also determined by what you choose your policy to protect.

That said, generally speaking, in the event of disability due to illness or injury, income protection covers:

  • up to 90 percent of pre-tax income for the initial six months of incapacity, and
  • up to 75 percent for a predetermined period after the first six months.

Again, the length of coverage differs across insurers and policy choices — from a fixed period through to coverage until your retirement. For a detailed explanation of the nuances, check out our Income Protection Coverage 101 — or alternatively, have a chat with us at ATB Wealth Strategies, where we’d be more than happy to discuss income protection cover.

Have a chat with us at ATB Wealth Strategies, where we’d be more than happy to discuss income protection cover.

Do I Need Income Protection?

So, is income protection for you?

If you’re a multi-millionaire, have the benefit of a wealthy and generous family, and hold extensive assets — loss of your monthly income due to illness or injury may have minimal detrimental effects, meaning salary protection is unnecessary.

Most of us, however, are not in this advantageous situation.

If you’re one of the millions of Australians who rely on their salaries to meet their daily financial commitments — with any loss of this pay leading to dramatic and devastating life impacts — you should seriously consider income insurance.

It’s particularly appealing to people who are:

  • Small business owners.
  • Employees — whose employer provides insufficient or no injury and sickness cover.
  • Professionals — doctors, solicitors, accountants, etc.
  • Responsible for others — if you have a family to support.
  • In debt — allowing you to meet loan and mortgage demands.
  • Not covered by trauma or disability in their life insurance policies.

For honest and understandable income protection advice, call us at ATB Wealth, and allow us to explain why this planning strategy can help with your personal circumstances.

Don’t wait until it’s too late, speak to us today.

Income Protection — What Is It Going to Cost?

Rather frustratingly, income insurance protection isn’t like a litre of milk or a dozen eggs — there isn’t a generally standardised price across the board.

As with all insurances, the cost is determined by a plethora of factors, including:

  • Age.
  • Income.
  • Occupation.
  • Lifestyle.
  • Employment history.
  • Medical history.

Furthermore, premiums are affected by policy-related specifics, such as:

  • Stepped or level premiums.
  • The insurer.
  • Coverage period.
  • Additions and exclusions.

For a more in-depth explanation of income protection pricing and how it’s calculated, take a look at our Ultimate Guide to Salary Insurance Costs — or alternatively, just give us a quick call.

Is Income Protection Worth It?

Some cynics consider income insurance as being the same as betting on a horse.

Instead of gambling on Fancy Nelly winning the 3.15 at Royal Randwick, you’re having a wager that at some point, you’re going to be incapacitated and unable to work. By this theory, if you remain in good health and don’t break your legs in a car accident, you’ve effectively lost — as you’ve paid your premiums for no reward.

This exclusive reasoning is, however, ridiculously flawed.

What Is Income Protection

Our daily lives are packed with precautionary measures that involve financial commitment — fitting a lock to your door, earthing your electrical appliances, and wearing a crash helmet on your motorcycle. Sure, you may never have a burglar try to break into your home, experience an electric shock, or fall off your motorbike — but you’ve taken extremely sensible steps to safeguard yourself and others.

And that’s why you should protect your income with insurance.

Not only does it provide welcome shielding to you and your family should the unexpected occur — but also delivers immeasurable peace of mind, allowing you to wake up every day safe in the knowledge that you and your loved ones’ futures are secured. So don’t leave it until it’s too late, call us at ATB Wealth Strategies now.

What Is Income Protection — Conclusion

Income protection is reassuring, preventative, and judicious — as critical to your financial planning strategy as life insurance and retirement planning.

Delivering priceless peace of mind, it offers a crucial lifeline — should unwanted surprises prevent you from working and earning an income. Not just for you, but for your spouse, partner, children, and dependents.

At ATB Wealth, our financial advisors will work with you to tailor the most watertight coverage relevant to your needs and personal circumstances — always ensuring you receive the ultimate in cover at the most affordable premium.

So don’t allow life to beat you down — speak to our expert and friendly team about what is income protection insurance, and arrange your cover today.

Don’t leave it until it’s too late, call us at ATB Wealth Strategies now.