Income Protection Insurance Cost
at ATB Wealth Strategies, Sydney
How Much Does Income Protection Cost?
It’s crucial for peace of mind, shielding you against the unexpected — but exactly how much does income protection cost?
This insurance type — sometimes called salary continuance — can be a valuable lifeline should illness or injury prevent you from working. Paying you an agreed percentage of your current salary, it allows you and your dependents to meet existing financial commitments, and takes away the immense burden of money worries — permitting you to concentrate on recuperation. However, naturally, this comes at a price.
While contractually, the insurer agrees to make these payments should incapacitation occur — your side of the deal is to meet monthly premiums. But how much do they cost, and how are the premiums calculated?
This How Much Does Income Protection Insurance Cost article addresses the above questions. But, for an exact figure based on your personal circumstances, call us at ATB Wealth Strategies today, where our expert financial advisors will tailor a bespoke quote.
The Factors Affecting How Much Income Insurance is:
The price of income protection isn’t fixed — it depends on numerous factors relating to your personal circumstances, employment, and chosen level of cover.
Here are the main determinants affecting how much is income protection insurance:
The challenges of becoming older aren’t just restricted to forgetting where you placed the TV remote, being unable to understand new smartphone tech, or experiencing new and novel aches in your body — they also include higher insurance costs.
As statistically, you’re more susceptible to medical issues, premiums tend to be greater than those of a younger age.
To awfully misquote George Orwell — all genders are equal, but some genders are more equal than others.
Men, for identical income protection policies and cover, can expect to pay lower premiums than women. Because, according to insurance companies, females are more likely to make a claim than males — based on historical trends.
The reason behind these statistical differences is debated but is assumed to be due to:
- Women can experience birth and pregnancy issues — obviously not a concern for men.
- Females have a higher risk of experiencing bone issues than males.
- Women are more likely to develop mental health issues.
- Females have a higher propensity for serious cardiovascular disease.
If you like to light up the Virginia weed — it’s a significant factor that will negatively affect income protection cost. Obviously, smoking increases the risk of a plethora of diseases — making a claim on an income protection policy more likely, and raising premiums by up to fifty percent.
However, thankfully there is some good news. If you take out income protection as a smoker, but later give up for a period of two years, many insurers allow you to change your policy to non-smoker status — reducing your premiums.
Pre-Existing Medical Conditions
When you apply for income protection, you need to declare any existing health issues and treatment you receive for these conditions. Some illnesses/diseases are automatically excluded from the policy — while others may be allowable at an elevated premium. Check our guide on What Does Income Protection Cover for more info.
When you apply to protect your income with insurance, you’ll be asked about your employment. The higher the element of physical or medical risk in your job — the greater the premiums.
For example, a scientist working with unknown life-threatening viruses in the Amazon, or a stunt motorcyclist frequently jumping the Grand Canyon — are more prone to incapacity than an accountant or novelist.
If you spend your weekends freediving, alligator wrestling, or free solo climbing — you run a higher risk of injury than stamp collectors, online chess players, and pom-pom knitters. Hence, if extreme hobbies are your bag — expect to pay higher income protection premiums than more reserved, and indeed, less interesting, Australians.
The waiting period determines the number of days until the insurance is paid — following your notification to the insurer of a claim. The shorter the timescale, usually the greater the insurance cost.
Additionally, should you have a significant amount of available sick leave, this period can be extended — saving you a lot of money. Extending the waiting period to six months can sometimes halve the cost of the insurance.
Period of Payable Benefit
When you take out salary protection insurance, you opt for cover to pre-agreed age — typically 60 or 65 years. Unsurprisingly, the longer the timescale of allowable payable benefits — the greater your premium.
Level or Stepped Premiums
As with life insurance, you can take income protection insurance with either level or stepped premiums:
- Level premiums — although costing more than stepped initially, they remain constant for the duration of the policy. In the long run, it can — in some circumstances — be the most affordable option.
- Stepped premiums — the price of the premium increases as you age. Admittedly, they’re pleasingly low to start — but then escalate as you mature — especially when you hit 40.
Give us a call at ATB Wealth Strategies today, where we will be more than happy to formulate a cost-effective income insurance policy based on your personal circumstances.
Let us help formulate a cost-effective income insurance policy based on your circumstances.
How Can I Get Cheap Income Insurance?
When looking at how much does income protection insurance cost in Australia, it’s important to remember that there are ways to make your premiums more affordable — without having a drastically negative impact on your coverage.
✔ Go for a lengthier waiting period before your benefits become payable — such as 60, 90, and 120 days — ideal if you have significant savings.
✔ Select a more restrictive benefit period — the length of time the insurance pays out.
✔ Consider a joint policy with your spouse or partner to receive multi-policy discounts.
✔ Prepay benefits to receive tax relief — up to a period of 12 months.
✔ Combine insurances — such as including it with TPD in your life insurance.
✔ Check your existing insurance policies — you may already have income protection in your life insurance or self managed super fund (SMSF).
✔ Pay your premiums annually instead of monthly.
At ATB Wealth Strategies, our friendly financial advisors are experts in tailoring income insurance cover that meets your needs and requirements, while remaining pleasingly affordable.
Call us now, and let us show you how.
The Cost of Income Protection from ATB Wealth Strategies, Sydney
Unexpected and unfortunate events can affect us at any time in our lives. If a challenging circumstance restricted your ability to work — could you still support yourself and your loved ones?
Income protection is a pleasingly affordable way to protect you and your family’s future — delivering reassuring peace of mind against life’s mishaps at a relatively low monthly premium. And pleasingly, in most circumstances, income protection premiums are tax deductible for you, the policy holder. And, at ATB Wealth Strategies, we have the expertise to deliver the ultimate in protection.
Call us now and ask us how much does income protection cost for my circumstances — and you’ll be pleasantly surprised at our answer.